«High-speed Railway»
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25 may

Railway: all these tasks are unsolvable without government help

The strategic direction of railways development is the management of rapid and high-speed service including forming of the united network in cities, which will host matches of 2018 FIFA World Cup. However, it is necessary to set high-speed transportation on special lines which demands essential financing, impossible with account of existing investment budget of the company.

JSC Russian Railways finished the last year 2010 with good results. Considering the growth of industrial construction on 8.2% the supply turnover of railway transport with account of light running of private and leased wagons has increased to +10.1%.

In general, due to accelerated growth of freight transportation RR has been able to exceed the income plan on 2.5%. In such a case, due to efficient management of expenses and growth of labor efficiency the cost of transportation has raised only on 4.7% in comparable conditions which is lower than the rate of inflation.

Company has been able to get additional income from depositing of property in the capital of subsidiaries and realization of freight wagons on auctions as a part of execution of decisions of the industry reformation. The gotten growth of income allowed to increase the investment budget of RR from 270.5 bln to 317.3 bln rubles.

For additional investments attracting the concept and the stock sale plan for subsidiary companies shares in 2010 — 2012 was approved by the Board of Directors. Target income from the stock sale in the amount of 132 bln rubles will allow to work without losses in 2011. 

Russian Railways Holding pays serious attention to the innovative development based on most advanced technologies. In last year October the model of the prospective Russian train Siemens Desiro Rus which was called “Swallow” was demonstrated. In current year we plan tests of a new prototype of R1C passenger car which are in use in the international railway service of all European and Asian countries. It will allow to considerably widen the geography of international passenger routes. RR negotiated supply agreements with ZAO “TransMachHolding” and Alstom to receive 200 new generation double-system rapid passenger EP20 electrics with 2.5 times increased maximal range beside current in 2012 — 2020. We have signed the contract with Ural Locomotives, the joint venture of Siemens and Sinara Group, to receive 221 2ES10 series freight electrics with induction motor drive. All these examples show the considerable success in sphere of innovative development in transport engineering of our country based on international cooperation.

The company pays considerable attention to maintenance of export-import transport traffic and transcontinental transit. In the first instance it touches on attracting of transit freights on the transcontinental East — West direction which basis is Trans-Siberian Railway. We have developed and now adapt the program of the a transport service which is called “Transsib for 7 days”.

New tasks

At the same time the increase of economic growth in Russia demands the priority development of transport infrastructure to prevent the deficit of transport facilities in the period of economic environment raise, which will unavoidable be the deterrent. And the main role in solving of this task belongs to a government as a global development institute. We know that state participation in infrastructure development in many countries of the World is the most powerful instrument of economy priming (China, Spain, Britain, France, Germany). Even in UAE, Vietnam, Cambodia the process of building and development of railways has moved faster. USA develops projects of high-speed railways building with appropriation of government subsidy. And it is no coincidence because railway development investments produce a colossal multiplicative effect due to demand for high-tech production and positive impact of transport development on economics.

JSC Russian Railways has proved its solvency as a reliable partner of the government. The total volume of the company's investment program has exceeded 1.7 trn rubles for 7 years. Despite very tense RR budget in 2011 the company has planned to invest 349 bln rubles in modernization, reprocessing and development of capital funds. It is 10% more than in 2010. However, funds devoted on the railway infrastructure development are insufficient for supplying estimated demand of economics. It is necessary to invest in massive development of the railway infrastructure, foremost, on following directions which:
  • provide transportation to the ports of Northwest, South and Far East regions of Russia;
  • develop key transport network for development of new deposits and creation of industrial areas in Western Siberia and on Yamal Peninsula, in Tuva and in area of Baikal-Amur Mainline;
  • provide the realization of export-import and transit potential of Russia with use of Transsib and improve the transport supply of Central region and Moscow transportation hub.

In such a case it is necessary to invest 2 trn rubles at 2010 values only in development of railway infrastructure of primary directions of the network by 2020. These are colossal assets but failure of such capital investments will lead to a real break-down of exportation of several millions tons of freights. The strategic direction of railway development is the creation of rapid and high-speed railway service including forming of a united network in cities which will host 2018 FIFA World Cup matches. However, it is necessary to manage high-speed transportation on special lines which demands essential financing, impossible with account of existing investment budget of the company.

JSC Russian Railways consider it necessary to make following steps to increase of investment sources:
  • First of all, to intensify efforts on reducing freight transportation rates to economically viable level and setting the tariff system up in accordance with the modern economical reality. 
  • Secondly, to develop the model of a network contract, the formalized system of relations between owner of a general use railroad infrastructure and a government as a consumer of required level of traffic performance of a national transport system; to provide the investments flow-in to the development of railroad transport;
  • Thirdly, to attract assets of private investors through the sovereign infrastructure bond issue. Received funds will become an additional source of modernization and development of the railway infrastructure, foremost, on priority directions of the railway network.

Only joint efforts can create an infrastructure basis for sustainable growth of Russian economics.

Salman Babaev, the Vice President of JSC Russian Railways

Source: “Vedomosti

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