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  1. Development of Russian Infrastructure as Part of the Strategy for the  Development of Rail Transport in the Russian Federation up to 2030
  2. Acquisition of New Rolling Stock
  3. Construction of New Railways
  4. Upgrading Existing existing Lines
  5. Expansion of High-Speed expansion Routes
  6. International transit corridors
  7. Provision of transportation for industrial projects and commodities
  8. Creation and Development of Terminal and Logistics Centres (TLCs)
  9. Attracting investments
  10. Expected results

1. DEVELOPMENT OF RUSSIAN RAILWAYS  infrastructure AS PART OF to the Strategy for THE DEVELOPMENT OF Rail Transport in the Russian Federation up to 2030

Ratified by the government of the Russian Federation in June 2008, the Development of Russian Railways Infrastructure as Part of the Strategy for Development of Rail Transport in the Russian Federation up to 2030 involves a significant expansion of Russia’s rail network in two stages. The first stage entailsmodernization period (2008-2015) to ensure the necessary capacity on key routes, a complete overhaul and upgrading of existing infrastructure the beginning of planning and surveying work for expansion, and the a start of construction of certain high-priority lines.

Among the Company’s top priorities are the reconstruction and technical enhancement of existing main lines and 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 ( 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.

1.jpgThere are two versions of the strategy, known as minimum and maximum. The minimum version envisages the construction of 16,017 km of new routes by 2030, while the maximum scenario calls for 20, 730 km of lines to be built.

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

The maximum version would create a world-class infrastructure and end all bottlenecks across the entire rail network. It would ensure a modern level of infrastructure development and provide transport links to areas with natural resources that were previously hard to reach. 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. ACQUISITION OF new rolling stock

By 2030, Russian Railways will have spent over 3 3.1 trillion roubles on acquiring new rolling stock, including 23, 300 locomotives worth 986 billion roubles, 996, 000 freight cars (1.3 trillion roubles), 29 500 passenger cars (529 billion roubles) and 24, 400 wagons (280 billion roubles.). The Company intends to replace all locomotives and wagons whose service life came to an end in or before2015.

Russian Railways will fund 65.9% of the investment, with private investors providing 27.2%, the Russian Federation 2.4% and constituent entities of 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 constituent entities part of that from Russian Railways will go towards new motorized wagons for suburban commuters.The money invested by the constituent entities of the Russian Federation will go towards new motorized wagons for suburban commuters. Russian Railways and private investors will purchase locomotives and freight and passenger cars.

3. CONSTRUCTION OF new railways

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

3.jpgAccording to estimates, the construction programme will cost 4.2 trillion roubles, with 58.6% coming from the Russian Federation, 11.9% from constituent entities 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 Government of the Russian Federation will finance the construction of the new rail lines, which will improve inter-regional transport connections.

Funds attracted from Russia’s constituent entities, Russian Railways and private capital capital will also be usedto to develop high-speed lines capable of accommodating 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.

Railways will account for a little over 3 trillion roubles to this sum, with the Russian Federation providing the remaining 200 billion roubles.

More than 6000 kilometres of secondary track - and , 366 kilometres of third and fourth rail systems will be laid between 2008 and 2030. In addition more than 7400 kilometres and fit automatic blocking on almost 5 000 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 Russian Far East, Siberia and on the Russian Black Sea coast as well as for new railway bridges across the rivers Ob, Shuya, Volga, Big Salym and Demyanka.

5. EXPANSION OF High-speed ROUTES

The development of high-speed lines in Russia will make rail travel more attractive and reduce journey times, thus enticing passengers away from passengers from air and road. This will make rail passenger services more profitable and help 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 international experience in planning, building and operating such lines into account. 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. Accelerating long-distance passenger trains travelling more than 700 km using a new generation of rolling stock, including sleeping cars for overnight journeys.
  2. Reconstructing 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 southof the country (Moscow – Adler/Sochi). This will be achieved by combining the modernization 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 hours. 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 “high- speed routes for trains operating at 350 km/h along selected corridors.

These include:

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

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

The total amount of investment needed for the high-speed strategy is estimated at 1261billion roubles in the maximum scenario, and 564.9 billion in the minimum, scenario (2007 prices excluding taxes and the purchase of land.)

The creation of dedicated high-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 high speed 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 to 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 logistics network that will allow “through” freight services between Europe and Asia.

This will help 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 services 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 the waiting time at borders from up to five 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  across the whole of Russia, from the Pacific Ocean to its western borders, in 7 to 11 days, at an average of more than 1000 km per day. Technology not only ensures journeys, but it also means that consignments can be delivered regularly and on time.

Sea freight could lose between 250 000 and 400 000 TEUs per year to rail services on east–west routes. The most obvious area of potential growth is 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.

6.jpgOn October 4 2008, after many years of discussions, work finally began on the reconstruction of the line between the border at Tumangan and Rajin in North Korea and build a container terminal at Rajin port. This is a pilot project of the plan to modernize the entire Trans-Korean railway.

Equally 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. However 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, the International Union of Railways. (UIC) is spearheading work on the creation of an east–west corridor in the northeast of the country.

The new corridor envisages a freight link from the Northeastern United States 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 Railway to Russian ports on the Pacific.

This corridor would reduce the time it takes for freight to travel from remote areasin western and central China to the industrial centres of the Northeastern United States and and Canada since the route is both shorter and quicker than the route across the Pacific. An alternative could be a sea leg via Murmansk Commercial Seaport in the north of Russia, thus avoiding the change of gauge at the border between Finland and Sweden. According to UIC data, freight volumes on this route could reach 190, 000 to 240, 000 TEUs a year in each direction.

7.PROVISION OF transportation for industrial projects and commodities

By 2030, Russian Railways plans to 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 Government of the Russian Federation.

Over 564 billion roubles, will be invested into the constriction of these new lines: 293 billion roubles  from the Russian Federation and 271 billion roubles from private investors.

One of the new lines, includes , a 49-km section between Russkoye and Zapolyarnoye which is required for the development of the Zapolyarnoe oil and gas condensate deposit in the Yamalo-Nenets Autonomous District, (with estimated reserves of at 3.3 trillion cubic metres of natural gas), and a 20-km stretch between Muslyumovo and Techenskoye for the Techenskyi magnetite ore deposit in Chelyabinsk Region, where 2 million tonnes of are will be extracted every year.

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

8. CREATION and DEVELOPMENT OF Terminal and Logistics Centres (TLCs)

Up to 40 TLCswill be set upin Russia’s major transport hubs by 2015. The first will be established in Moscow (Kuntsevo and 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 the processing, storage and warehousing and customs clearance of cargo and containers and will also provide a full range of additional value-added services.

9. ATTRACTING INVESTMENTS

13675.jpgThe total amount of investment needed for rail development between 2008 and 2030 is estimated at 11,447.8 billion roubles in the minimum version. This breaks down into 5119.5 billion roubles for the initial period ( 2008-2015), including of which 954.7 billion roubles for the development of specific projects, and a further 6328 3 billion roubles from 2016-2030.

In the maximum version, the total investment amounts to 13,812.4 billion roubles. Spending in 2008–2015 will be slightly higher than in the minimum version at 5218.9 billion roubles, including 1054.1 billion for will be for specific projects.The allocation for 2016-2030 is significantly greater, at 8593.5 billion roubles.

All figures 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 and regional budgets, as well as from private private investors, including RZD itself. Specific projects and specialized services will be fully funded by private investors.

The creation of a strong rail network will lead to a significant improvement in  the provision of in transport services 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 Russia meet its national transport objectives. The expanded infrastructural base will ensure the country’s territorial integrity, reduce regional inequalities and create the necessary 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 constituent entitiesby by 2030. At the same, many existing limitations on capacity will be removed.

Russian Railways hopes to harness the country’s unique unique geographical position to fulfill its potential as a transcontinental land bridge.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 being 3.5 times faster. Increasing the speed and reliability of freight transport will help to lower costs for manufacturers and make Russian products cheaper and more competitive.

In the passenger sector, the strategy will significantly improve the mobility of the population. Rail travel will be on a par with the leading countries in the world, 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 10, 917 km – which represents a 17-fold increase. And, all being well, RZD should be running 350 km/h services on 1500 route-km by 2030.

Russian railways holding  Development Strategy for the period until 2030 (general)