Page 110 - RusRPTMar19

9.1.12 Transport sector news
The government approved RUB6.3 trillion for transport infrastructure.
Deputy PM Maxim Akimov has approved all nine federal projects comprising the transport portion of the state infrastructure development plan. The projects include developing the China-Europe transport corridor and the Northern Sea Route, as well as building ports, airports, and railways. Total costs will be RUB6.3 trillion ($96.5bn) by 2024. Infrastructure investors are skeptical that the plan will be completed. One investor interviewed by Vedomosti noted that there’s no reason to believe more than 10% will be implemented. Others are more optimistic, projecting 30-40% completion. At the end of the day, Russia simply does not have the building capacity. Builders are already refusing contracts due to excessively tight regulation, siloviki involvement, and low profitability. A lot of well-connected general contractors should make a pretty penny though.
● The government has approved two methods for selecting projects, one advanced by Akimov and the other by MinEkonomiki.
● The first separates projects into two categories—those that boost economic development and those that support existing infrastructure. The Analytical centre, which effectively works within Akimov’s office, will assess potential projects by these categories.
● MinEkonomiki’s method wants to evaluate the direct and indirect effects of potential projects. Direct effects include a reduction in transport costs for companies using the infrastructure, while indirect effects focus on the environment, transport accessibility, and migration.
● MinEkonomiki will send an annual report on the program’s progress to the prime minister and presidential administration.
● Trains
Unconditioned freight causing problems. New reports show that a lack of refrigerator or isothermal railcars is having a negative effect on the quality of perishable goods delivered by rail. Over 70% of Russia's annual catch for fish comes from the Far East, much of which is shipped to European Russia by rail. By setting higher tariff rates for more expensive wagons, there are effectively incentives to avoid ensuring product quality as well as parts of fleet modernization for shippers. Better regulations could aid domestic industrial orders, so expect to hear more about this in the coming months. As much as 65% of perishable goods in Russia are delivered in Russia by rail, with average delivery distances hovering at or above 1,000 kilometers on average. German Zverev, president of the All-Russian Association of Fisheries, Fishing Entrepreneurs, and Exporters, estimates that 10-15% of fish deliveries are lost due to spoilt deliveries. Refrigerator cars are estimated to be 50-60% more expensive on average than normal rail wagons. Isothermal cars (which trap and record temperatures) are 20-30% more expensive.
Russian Railways is asking Russia’s government to temporarily lift a ban on the import of locomotives engines and generators from Ukraine, reports Belprauda, a Belarussian news site. The railroad asked Russia’s Industry and Trade Ministry exemption from Moscow’s Dec. 29 ban on the Ukrainian-made parts until Russian manufacturers learn how to make their own. Separately, Russian rail car manufacturers, barred from buying Ukrainian wheels, are turning to two Chinese companies to supply 400,000 wheels through 2022, reports Kyiv’s centre for Transportation Strategies.
110 RUSSIA Country Report March 2019 www.intellinews.com