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The Company
Strategy

Strategy

  1. Russian Railway’s infrastructure development according to the Strategy for Developing Rail Transport in the Russian Federation up to 2030
  2. Acquiring new rolling stock
  3. Constructing new railways
  4. Upgrading existing railways
  5. High-speed expansion
  6. International transit corridors
  7. Providing transportation for industrial projects and commodities
  8. Creating and Developing Terminal and Logistics Centres (TLCs)
  9. Finding the investment
  10. Expected results

 

1. Russian Railway’s infrastructure development according to the Strategy for Developing Rail Transport in the Russian Federation up to 2030

Ratified by the government in June 2008, the Strategy for Developing Rail Transport in the Russian Federation up to 2030 envisages a significant expansion of Russia's rail network in two stages. The first involves a period of modernisation (2008-15) to ensure the necessary capacity on key routes, a fundamental renewal and upgrading of existing infrastructure and the beginning of planning and surveying work for expansion, as well as a start on the construction of some high-priority lines.

Among the Company’s top priorities are the reconstruction of existing main lines and their technical enhancement, along with the construction of new lines to remove infrastructural limitations to Russia's economic growth.

A further priority is the construction of dedicated freight lines, which will be determined by how rapidly deposits of natural resources are tapped and the development of new industrial zones. Around 13,800 route-km will be upgraded for heavy axle loads, helping to reduce the cost of bulk freight shipments.

The second stage from 2016 to 2030 involves large-scale expansion. This will create the infrastructure needed to develop new areas of economic growth across Russia's vast territory, achieving a world-class level of technology and improving the competitiveness of the country’s rail system on the global market.

Construction
   of new rail lines till 2030There are two versions of the strategy, known as minimum and maximum. The minimum version envisages the construction of 16017 km of new route by 2030, while the maximum scenario calls for 20730 km.

The minimum strategy focuses on full modernisation of the existing rail infrastructure and developing the necessary capacity on key freight corridors to meet the needs of the economy and population. New areas of economic growth will be served and some freight-only and high-tech lines constructed. This includes the long-envisaged high-speed line between Moscow and St Petersburg, while elsewhere the construction of new lines will focus on strategically important routes, such as those which open up mineral reserves or improve links between the regions.

The maximum version would create a world-class infrastructure and end all capacity bottlenecks across the entire rail network. It would ensure a modern level of infrastructure development and provide transport to open up areas of natural resources. This version envisages, for example, constructing a railway line all the way to Magadan in eastern Siberia, opening up Russia’s north-eastern region for development and providing a reliable rail service to some of the most remote parts of the country.

 

2. Acquiring new rolling stock

By 2030, Russian Railways will spend more than 3.1 trillion roubles on acquiring new rolling stock, including 23300 locomotives at a cost of 986 billion roubles, 996000 freight cars (1.3 trillion roubles), 29500 passenger cars (529 billion roubles) and 24400 wagon vans (280 billion roubles.). The Company intends to replace all the locomotives and wagons whose service life has ended by 2015.

Russian Railways will fund 65.9% of the investment, with private investors providing 27.2%, the Russian Federation 2.4% and administrative areas of the Russian Federation the remaining 4.5%.

Public funds will be used to purchase goods wagons for military transport.

The investment from Russia’s administrative areas part of that from Russian Railways will go towards new motorised wagons for suburban commuters. Russian Railways and private investors will purchase locomotives and freight and passenger cars.

 

3. Constructing new railways

Over 20,000 km of new railway lines are to be laid by 2030.

RZD constructing new railwaysAccording to estimates, this construction programme will cost 4.2 trillion roubles, with 58.6% coming from the Russian Federation, 11.9% from administrative areas of the Russian Federation, 10.7% from Russian Railways and 18.8% from private investors.

The new lines will ensure transport to and from industrial zones and newly developed mineral deposits. Most of the funding will come from private investors and the Russia government.

Russian Railways, private investors and to some extent the Russian government will finance the construction of the new rail lines, which will improve inter-regional connections.

It is also planned to attract funds from Russia’s administrative areas, Russian Railways and private capital to develop high-speed lines capable of taking trains travelling at up to 350 kmph.

 

4. Upgrading existing railways

According to the Strategy, the cost of upgrading existing railways will exceed 3.2 trillion roubles.

This figure includes a little over 3 trillion roubles to be provided by Russian Railways and over 200 billion roubles by the Russian Federation.

Between 2008 and 2030, it is scheduled to lay more than 6000 kilometres of secondary main track, 366 kilometers of third and fourth lines, carry out the complete electrification of sections totalling more than 7400 kilometres and fit automatic blocking on almost 5000 kilometers of track.

There is also a need to build bypasses around the railway junctions in Krasnodar, Saratov, Chita, Yaroslavl, Irkutsk, Perm, Novosibirsk and Moscow.

The Strategy also provides for the renovation of tunnels in the Far East, Siberia and on Russia’s Black Sea coast and for new railway bridges across the rivers Ob, Shuya, Volga, Big Salym and Demyanka.

 

5. High-speed expansion

The development of high-speed lines in Russia will make rail travel more attractive and reduce journey times, attracting passengers from air and road. This will make rail passenger services more profitable and help to reduce the environmental impact resulting from the growing demand for travel.

In order to develop high-speed lines in Russia, a new set of technical specifications, national standards and regulations have to be developed that take into account international experience in planning, building and operating such lines. The right financial system must also be put in place to ensure that the projects can be funded and the roles and forms of state and private investment in the various projects defined.

The strategy sets out a systematic programme to increase the speed of passenger services in three distinct phases:

  1. Accelerate long-distance passenger trains travelling more than 700 km by using a new generation of rolling stock, including sleeping cars for overnight journeys.
  2. Reconstruct existing lines between key regional centres to handle high-speed services using fast trains running at 160 km/h to 200 km/h. A key priority in this category, for example, is the route from central Russia to the south (Moscow – Adler/Sochi). We will achieve this by combining the modernisation of the current route with the construction of a new line along the Prokhorovka – Zhuravka – Chertkovo – Bataisk section. The whole package is expected to reduce journey times between Moscow and Adler to 15 h. The total length of high-speed lines in this category will be around 11,000 route-km. On some routes, additional track will have to be laid to accommodate conventional passenger and suburban trains, as well as freight services.
  3. Develop dedicated "super speed" routes for trains operating at 350 km/h along selected corridors.

These include:

  • St Petersburg – Moscow (target journey time about 2 h 30 min);
  • Moscow – Nizhny Novgorod (1 h 40 min);
  • Moscow – Smolensk – Krasnoe (2 h).

This last is part of International Transport Corridor 2 and could be extended westwards into the European Union.

Total investment needed for the high-speed strategy is put at 1261.6 bn roubles in the maximum scenario, and 564.9 bn in the minimum, at 2007 prices excluding taxes and the purchase of land.

The сreation of dedicated super-speed routes in Russia will require the development and implementation of new technical and legal frameworks.

These are likely to be based on the technical regulations currently being developed for safe railway operation at high speeds. Given Russia's lack of experience in the construction and implementation of very fast railways, Russian Railways is considering adopting the normative base from EU countries such as France and Germany as a starting point and adapting them for Russian conditions.

 

6. International transit corridors

One of Russia’s highest transport priorities is the creation of effective, safe and reliable overland international corridors to increase the competitiveness of the country’s transport network. We plan to create a logistical network that will allow ‘through’ freight services between Europe and Asia.

This will help to increase trade between Europe, Russia, the CIS countries and the Asia-Pacific region and facilitate the development of intermodal transport in particular, boosting economic activity and employment in the regions through which the routes pass.

On the east-west axis in particular, work will continue on the development of the Trans-Siberian route, which as the key link in RZD’s Eurasian transport services has huge potential.

We have significantly improved the quality of service on the Trans-Siberian in recent years by simplifying procedures for clearing goods through customs and implementing a range of additional measures to ease the border crossing process. A simplified system for declaring goods in containers has reduced their waiting time at borders from up to 5 days to just a few hours, while our new IT systems provide comprehensive information and track the movements of wagons and containers in real time.

These fast container trains allow freight to be moved right across Russia, from the Pacific to the western borders, in 7 to 11 days, an average of more than 1,000 km per day. Technology not only ensures a quicker journey, but also means that consignments can be delivered regularly and on time.

Between 250 000 and 400 000 TEUs a year could be attracted from sea to rail on this axis. The most obvious potential is for freight shipments between Europe and Korea, Japan and northeast China. The development of this transit route depends to a great extent on the project to revive the Trans-Korean Railway, completing a direct rail link between Europe and South Korea and avoiding the current sea leg between Busan and Vladivostok.

Development of the Trans-Siberian
   routeOn October 4 2008, after many years of discussions, work began to reconstruct the line between the border at Tumangan and Rajin in North Korea and build a container terminal at the port of Rajin. This is a pilot project for the plan to modernise the whole Trans-Korean railway.

No less important is the development of a north-south international corridor as an alternative to the sea route linking Europe with the Persian Gulf and Indian Ocean.

At the moment the competitiveness of this route is reduced by the double transfer of goods when crossing the Caspian Sea, but in May 2005, an agreement was signed by the railways of Azerbaijan, Russia and Iran to construct a new line from Qazvin in Iran to Astara in Azerbaijan. The new track will run along the western shore of the Caspian Sea and will not only complete the shortest rail route between the ports of the Baltic Sea and the Persian Gulf, but also provide direct rail connections with Pakistan and India.

Meanwhile, work to create a northern east-west corridor is being led by the International Union of Railways.

The new corridor envisages a freight link from the northeast USA and Canada (Boston and Halifax) via the port of Narvik in Norway and then through Sweden, Finland, Russia and Kazakhstan to northwest China, with a connection via the Trans-Siberian to Russian ports on the Pacific.

This corridor would reduce the time for freight flows from the hinterland of western and central China to the industrial centres of the northeast USA and Canada since it is both shorter and quicker than the route across the Pacific. An alternative could be a sea leg via Russia’s northern port of Murmansk, thus avoiding the change of gauge at the border between Finland and Sweden. According to UIC data, freight volumes on this route could be 190 000 to 240 000 TEUs a year in each direction.

 

7. Providing transportation for industrial projects and commodities

By 2030, Russian Railways will build lines to 18 industrial zones and promising mineral deposits, which will require more than 4600 kilometres of railway lines with funding coming from private investors and the Russian government.

Total investment for these new lines is over 564 billion roubles, with 293 billion roubles coming from the Russian Federation and 271 billion roubles from private investors.

Among the new lines, in particular, is a 49km section between Russkoe and Zapolyarnoe which is required for the development of the Zapolyarnoe oil and gas condensate deposit in the Yamalo-Nenets Autonomous District, whose reserves are estimated at 3.3 trillion cubic metres of natural gas, and a 20km stretch between Muslyumovo and Techenskoe for the Techenskyi magnetite ore deposit in Chelyabinsk Region, where it is planned to extract 2 million tons of ore every year.

Implementing the maximum version will lead to a fundamental change in international trade links within the Eurasian, Asia-Pacific and North-American regions.

 

8. Creating and Developing Terminal and Logistics Centres (TLCs)

It is planned to create up to 40 TLCs in Russia’s major transport hubs by 2015. The first will be established in Moscow (Kuntsevo, Kursk), the Moscow Region (Belyi Rast), Leningrad Region (Shushary), Yekaterinburg, Nizhny Novgorod, Novosibirsk, Irkutsk and other major cities. Each TLC will be a major technological complex for processing, storage and warehousing and customs clearance of cargo and containers and will also provide a full range of additional value-added services.

 

9. Finding the investment

Scheme of investmentsThe investment needed for rail development between 2008 and 2030 is put at 11447.8 bn roubles in the minimim version. This breaks down into 5119.5 bn roubles for the initial period from 2008-15, of which 954.7 bn roubles is for the development of specific projects, and a further 6328.3 bn roubles from 2016-30.

In the maximum version, the total investment amounts to 13812.4 bn roubles. Spending in 2008-15 is slightly higher than in the minimum version at 5218.9 bn roubles, of which 1054.1 bn will be for specific projects, but the allocation over 2016-30 is significantly greater at 8593.5 bn roubles.

All prices are in January 2007 prices, excluding VAT and the purchase of land!

Funding for the strategic development of general rail transport in the first period will come from the national budget, regional budgets and private investors, including RZD itself. Specific projects and specialised services will be fully funded by private investors.

The creation of a strong rail network will lead to a significant improvement in transport provision in many regions. This will provide a basis for social and economic development at a faster rate than planned. Depending on the dynamics of regional growth, it may prove necessary to build additional lines for social or economic reasons.

 

10. Expected results

Implementing the railway development strategy will help to meet Russia’s national transport objectives. The expanded infrastructural base will ensure the country’s territorial integrity, reduce regional inequalities and create the conditions to promote the growth of the Russian economy.

Under the maximum scenario, the coverage of the Russian rail network will increase by 24%, so that common-user rail services will become available in 80 of the country’s 83 regions by 2030. At the same, many existing limitations on capacity will be removed.

Russian Railways hopes to harness Russia’s unique geographical position to fulfill its potential as a transcontinental landbridge. A near-trebling of transit traffic will contribute to a projected 60% increase in freight volumes. The average speed of freight trains will also increase by more than 23%, with premium container services 3.5 times faster. Increasing the speed and reliability of freight transport will help to lower costs for manufacturers and help to make Russian products cheaper and more competitive.

In the passenger sector, the strategy will significantly improve the possibilities for Russian citizens to move around the country. Rail travel will become world-class, and the number of passengers is expected to increase by 33%. The average speed of long-distance passenger trains will increase to 72 km/h on major routes. The length of route suitable for operation at 160 to 200 km/h will rise from 650 km to 10917 km – a 17-fold increase. And all being well, RZD should be running 350 km/h services on 1500 route-km by 2030.

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