Russian Railways invests $18.7 billion in Far East

On July 18, Russian Railways and the Ministry for Development of the Russian Far East signed a cooperation agreement.

The agreement encompasses the reconstruction of the railroad infrastructure in the district—in particular, the construction of a bridge to Sakhalin Island, the modernization of the Baikal-Amur Mainline, the reconstruction of the Trans-Siberian Railway, and the connection of the Trans-Korean Mainline to the network of Russian railroads.

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According to Vladimir Yakunin, president of Russian Railways, executing the top-priority development and modernization measures for the Far East railroad infrastructure by 2018 will cost around 562 billion rubles ($18.7 dollars).

The agreement affirms what is already being done and sets challenges for the future—it specifies “concrete goals and concrete actions,” said Viktor Ishaev, presidential envoy to the Far East Federal District. He noted that 260 billion rubles ($8.7 billion) of the required amount are direct government funding; Russian Railways will invest the difference.

“When discussing the government's allocation of 260 billion rubles for developing the Eastern range, Trans-Siberian Railway and BAM, we must not forget that Russian Railways must, at the same time, allocate 302 billion rubles [$10 billion] in this period. Thus, this figure is added in,” Vedomosti quoted Yakunin as saying.

The Trans-Siberian Railway is one of the busiest thoroughfares in the world, and, as Yakunin stated last autumn, its carrying capacities are practically exhausted. According to him, Far Eastern businesses file applications to transport around 100 million tons of freight, but the Trans-Siberian Railway can only support a maximum of 52 million tons.

The infrastructure's deterioration decreases the competitive edge of Russian railroads, in terms of transporting freight across Russia.

“On the Trans-Siberian Railway, the average speed is 40 kilometers per hour [25 miles per hour], while, on the competing Chinese railroad tracks, it is 100 kilometers per hour [62 miles per hour],” Andrei Ostrovsky, an expert on China and the deputy director of the Institute of Far Eastern Studies of the Russian Academy of Sciences, told the newspaper Vzglyad.

According to experts, investing the stated resources will make it possible to provide shipping for an additional 55 million tons of freight in the Far East—and the bulk of freight transport between Europe and Asia is a drop in the bucket.

In order for these railway lines to take on another 40–50 percent of container cargo traffic between Asia and Europe, political analyst Dmitri Verkhoturov believes it is necessary to increase the throughput capacity of BAM and the Trans-Siberian Railway to at least 1 billion tons per year, or, ideally, to 1.5 billion tons.

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