Next to other railway infrastructure development programmes in Russia, the development of Baikal-Amur and Trans-Siberian railways is essential for increasing the carried freight volumes and, therefore, for the national economy. The final months have witnessed intense debates between the authorities responsible with setting the criteria and steps to be adopted in developing the project.
At the end of 2013, Prime Minister Dmitry Medvedev signed the resolution which sets the main parameters on the implementation of the project on the modernisation of Trans-Siberian and Baikal-Amur railways, document prepared by the Ministry of Transport. The implementation of the project on the modernisation and rehabilitation of the two railways of major significance for the Russian railway system means evaluating freight traffic on these lines, emphasizing the long-term share of freight transport, updating the development plan of the railways and their infrastructure (based on traffic estimates), identifying necessary finances sources, as well as elaborating a business plan and a financial model to apply the modernisation plan and to operate the railways. To accelerate the launch of the project, the Russian Government approved a series of documents and initiatives presented by the ministry.
With a length of over 10.5 thousand electrified km, the Trans-Siberian is capable to carry over 100 million tonnes of freight per year, covering 45% of domestic railway traffic and connecting the Asia-Pacific to Europe-Central Asia regions.
Compared to maritime transport, the railway reduces freight transport time by two thirds (container transport from China to Finland lasts less than 10 days compared to 28 days in the case of maritime transport). Transhipment needs are also minimized which also cuts costs, but also the risk of goods damage caused by handling. To increase transit capacity in Europe and Asia Pacific, the Russian Government and RZD have agreed on implementing investment projects in the east of Trans-Siberian (to ensure the increase of freight transport and transit between Russia and China), to upgrade and develop the stations at the border with Mongolia, China and North Korea (projects already completed) and to upgrade container terminals. By 2015, RZD plans to allocate RUB 50 Billion (USD 1.5 Billion) for the modernization of the railway.
The Baikal-Amur railway (BAM) has been designed to complement the Trans-Siberian and to deliver Russia with a second railway connection from Siberia to Asia-Pacific (over 3 thousand km long, the line is parallel to approx. 770 km north of the Trans-Siberian). According to the estimates of Russian Railways, by 2020, freight transit on the BAM line will increase to 220 t-km, 3.4 times more than the volume registered in 2008. To meet traffic demands, there has to be financing granted to improving and developing infrastructure and to upgrading signalling systems, stations etc.
Estimated investments
In 2013, RZD initiated the development of the largest investment projects: Trans-Siberian and Baikal-Amur. During a reunion organised by RZD in January, the railway experts analysed the result of the independent audit on the development of the Trans-Siberian and Baikal-Amur railways. It was for the first time in Russia that the technical and financial audit was elaborated by a company that had nothing to do with the implementation of a project of such major significance.
According to the decision of the Prime Minister, the project was granted a financial support of RUB 260 Billion (USD 7.5 Billion), including RUB 150 Billion (USD 4.4 Billion) allocated through the National Welfare Fund. At the moment, RZD estimates the costs of the project at RUB 560 Billion (USD 16 Billion) and the company wants to invest RUB 300 Billion (USD 8.7 Billion) from own funds. According to analyses, when completed, the project will increase transport demand by 55 million tonnes, compared to present levels, with cargo mainly including raw materials supplied by the coal and ore deposits in the Far East.
The outcome of the audit (based on the current stage of the project), there is a series of comments and notes to the documents prepared by RZD on paying further attention to the different phases of the project. Also, according to the audit and, therefore, experts, the project has not sufficiently analysed the estimates of traffic flows in the Kuzbass region which means ensuring freight volumes from the deposits of the Far East and Trans-Baikal. However, “RZD representatives believe that in order to meet railway transport demands in Kuzbass, it is necessary to implement the next stage of the project of the two railways and to find the necessary financing”, the company stated.
Regarding the analysis of technological solutions, the fundamental problem has been to choose between the construction of the second line, crossings with double lines or additional lines for increasing capacity. Due to the high costs of building the second line, RZD has recommended the elaboration of documents only for this variant.
The Federal Council discussed the implementation of the project in March. They considered the technical aspects and decided on elaborating a cost report during the development and approval phase on design specifications and cost parameters. The design phase for the regions crossed by the two railways is currently in progress and the schedule of design, construction and installations has been prepared together with local design institutes. Moreover, the necessity of approving the progress of the first phase of reconstruction and modernisation works has been stressed.
USD 16 Billion could be allocated by 2018, said RZD President Vladimir Yakunin during the Russian Transport Forum (December 2013). “RUB 320 Billion (USD 8.5 Billion) of the amount will be granted by the company, from own sources”, he said. The remainder will be granted by the Russian Government. This year, RZD’s Board approved the establishment of a Railway Development Directorate for the eastern part of Russia, as subsidiary of the company responsible with coordinating the development of the Baikal-Amur and Trans-Siberian railways. The program for the railway infrastructure development in eastern Russia has already been elaborated and includes, in the first phase, investments worth RUB 562 Billion (over USD 16 Billion), of which the state could grant RUB 260 Billion (USD 7.5 Billion) and RZD would grant the rest. The financing method has already been completed and the technical and cost audit has been completed. Also, the schedule of design, research, construction and installations works has been established.
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