Vladimir Denisov

T

he State Council of the Russian Federation has set the major directions of the country’s transport strategy till 2025. The most important task of this strategy is to develop a basic transportation route network. The existing network in the European part of Russia mainly needs modernization. But as far as Siberia and the Far East with their most promising deposits of natural resources are concerned, new transportation routes should be made available.
All the year round in any region
The means of transportation have a special significance for Russia that stretches out for 11,000 km from east to west and for 5,000 km from north to south. Precisely the transport makes the country a single whole especially taking into account its vast territory with cold climatic conditions and rather complicated transportation even in a dry summertime. This industry accounts for almost 7% of Russia’s GDP. Its share of capital assets and investments amounts to 12% and 15% respectively.
The economic growth, which has been taking place in the country for the fifth straight year, has resulted in increasing demand for all means of transportation. Starting in 2000 the increase in freight transportation has averaged 3.8% a year while the passenger traffic has grown by 6.7 %. But loading of different types of the transport is uneven: the growth of the transportation volume is provided by railroads and trucks but so far the development of the aviation and water transport is lagging behind. Other disproportions are apparent as well. The throughput capacity of the transport as well as its technological level do not correspond to growing volumes of freight flows. The insufficient complexity causes additional reloading of cargo. The situation gets more complicated by constant increases of tariffs. Because of all these reasons the share of transport expenses in the prime cost of Russian products reaches between 15% and 20% as compared with 7% to 8% in countries of developed market economy.
In the words of Russia’s minister of transportation Sergei Frank, the new transport strategy is aimed at "making means of transportation available for passengers and cargo all the year round in any region of Russia". That is why the transport program makes a special emphasis on developing "small" aviation and inland water transport as well as constructing local roads, which are designed to link the faraway territories with the basic transportation route network.
Under the program the transport becomes one of the chief instruments of involving Russia in global economic processes and it will let the Russian economy enter new markets.
As the biggest customer the transport industry will give an impetus to developing other sectors of the national economy. The railroads need modern locomotives, freight container cars. The sea fleet requires large-capacity tankers, gas and container carriers, ferries, ships of the higher ice class. The demand is especially high at the aviation transport for planes for nearby main lines. The inland water transport should get new boats with a higher cost-effectiveness as well as boats for shallow rivers. The demand is growing at the cargo motor vehicle transport for road-trains to handle main line haulage.

New projects differ by scale
Implementation of several key projects provides for developing the transportation route network. The development of the Trans-Siberian Railroad and its branch tracks is continuing. This line will be supplemented by the national freeway between Moscow and Vladivostok. In 2004 the construction of the section between Chita and Khabarovsk will be completed and the thruway movement on the whole 10,000 km -long route will be opened.
Construction of railroads will be continued in major regions of oil and gas production. Reconstruction of Sakhalin’s railroads is planned. Yakutiya Railroads JSC has already built a railroad over 300 km long and it intends now to construct a section 600 km long that will extend up to the city of Yakutsk. Earlier, there were no railroads in this region of Eastern Siberia at all.
There are plans to build the North Siberian Railroad that will link oil production sites in Western Siberia with the town of Ust-Ilimsk, where this railroad will be connected to the Baikal-Amur Railroad. The track will become the main part of the future North Russian Eurasian Railroad.
Minister Sergei Frank says: "In order to raise the throughput capacity of existing freeways the transport program provides for constructing new bridges over the Volga near the cities of Yaroslavl, Ulyanovsk and Volgograd, over the Gulf of Kola near the city of Murmansk, over the Kama near the city of Perm, over the Ob near the city of Novosibirsk and over the Angara near the city of Irkutsk. The program also includes building of new tracks to traffic centers, sea and river ports, terminals".
The most important freeways between Moscow and Minsk, between Moscow and Rostov-on-Don as well as others will reconstructed. In addition, a beltway around Saint Petersburg, detours near Nizhny Novgorod, Novosibirsk, Krasnoyarsk, Irkutsk and other cities will be built. The northern routes in the country’s north-east along the Lena-river as well as the highways between the cities of Salekhard, Novy Urengoy and Surgut, between Yakutsk, Viluy and Mirny will become multi-way divided highways with modern pavements.
The program pays a special attention to developing sea and river shipping. The transport strategy provides for a complex modernization of the North Sea Route, including reconstruction of ports and building nuclear-powered ice-breakers of the new generation. This will speed up developing mineral resources near the North pole and large reserves of oil and gas on the arctic shelf.
The opening of sea ferry routes between ports of the Leningrad and Kaliningrad regions, development of similar links on the Caspian Sea, complex system modernization of the Far Eastern ports will reliably link the Russian transportation route network with the main European and Asian routes.
There will be reconstruction works on river routes and, in particular, on hydraulic structures of the Volga-Don Canal as well as these rivers’ ports.
As for the aviation transport, it is planned to open up new routes for Russian and foreign air companies, to switch over to a uniform system of basic airports, to do a radical modernization of production facilities, to develop technologies and find engineering solutions for the promising CNS/ATM concept of the International Civil Aviation Organization. As a result, the efficiency of interaction of the Russian aviation network with similar foreign systems will increase and the management of Russia’s air traffic will correspond to the highest technical standards.

Efficiency, reliability and speed
At present, supplies of energy carriers are a key element of Russian export shipments. The transport strategy provides for their increase in the eastern, north-western and northern directions with Russian ports serving as a base. This will reduce risks related to the use of routes, which are not totally controlled by Russia. There are opportunities for an advantageous diversification in export shipments of natural gas that today is passing through pipelines. In the nearest future specialists from the companies Gazprom and Sovkomflot will complete developing new marine technologies of gas export shipments. Coal export shipments via Russian ports will significantly grow up as well. Under the strategy, by 2010 national ports will process up to 85% of the foreign trade load. Sea and motor vehicle carriers face a task to achieve at least a stable parity with competitors.
Developing market relations results in a natural shift of the balance toward the motor vehicle transport. In order to fully use the potential of motorization that has steeply increased in the last decade there is a need for an accelerated development of a road network. To this end it is intended to significantly improve the quality of road projects and use new technologies for their construction. It is especially important to build high-speed freeways in the major transport corridors: from Saint Petersburg toward Moscow and the Black Sea region as well as from the country’s western border to Ural, Siberia and the Far East. This set of issues will be examined in the National program of modernization and development of freeways, which will be sent to the Russian government in 2004.
The development of high-speed haulage by railroads is provided for as well. The first phase of the high-speed passenger traffic program has been completed: the operation of trains with the speed of 200 km an hour has been arranged at the section between Moscow and Saint Petersburg. Works are underway on the railroad route between Saint Petersburg, Vyborg and Helsinki. According to Russia’s minister of railways Vadim Morozov, "in 2008 the time of traveling by this route will be reduced to 3.5 hours".
Increasing the train maximum speed will be ensured in the transport corridors from Moscow to the South, from Nizhny Novgorod to Moscow and, further on, to Minsk, Warsaw and Berlin. In the future high-speed railroads should become common in Russia’s transport infrastructure.
One of the major tasks of the transport strategy is to significantly accelerate movement of goods. In the words of Sergei Frank, "by 2020 the speed of moving freight will increase between 20% and 30% in the main transport corridors. The transport strategy provides for developing the transportation-forwarding business and multi-modal technologies. They will be based, above all, on containerization of the transportation process".
Today, just a little more than 30% of imported and 6% of exported goods are transported in containers in Russia. Figures for the domestic trade are even lower. The strategy sets a goal to raise manufacturing of containers as well as rolling-stock for them and develop a network of container terminals. In the first place, works will be done to expand old terminals and construct the new ones in ports on the Baltic Sea (Saint Petersburg, Ust-Luga and Kaliningrad), on the Black Sea (Novorossiisk), on the Caspian Sea (Olya), on the Pacific Ocean coast (Vostochny). By 2010 Russian ports will be capable of handling from 6 to 7 million containers a year.
There are plans to rapidly introduce information technologies: satellite navigation systems will become an instrument of managing shipping operations and, above all, the container ones.
With enormous Russian distances the civil aviation is especially important. It is planned to get developed as a kind of mass transport. In order to make flights more affordable for the population, costs will be reduced through new energy-saving measures by the industry. Currently, due to the low effectiveness of the fuel use the Russian aviation wastes $300 million a year. Soon the civil aviation will offer a new market product: an opportunity to book tickets that will allow not only to change flights but to switch over to the ground transport. International and domestic alliances as well as alliances of air carriers with transportation carriers of other kinds will become the main structures of the aviation market.

State control and private initiative
When the transport strategy was being worked out, there were conflicting opinions on the State’s role in this sector of the national economy: from calls to nationalize transport systems to statements on the necessity of their complete privatization. Speaking at the meeting of the State Council president Vladimir Putin put forward an apparent market-oriented position: "The State should act as a transactor unit and monopolistic owner to the ever diminishing degree. Instead, it should participate more and more in working with entrepreneurs providing them with new opportunities for implementing their initiatives". In fact, precisely these words can be regarded as the bottom line of the discussion.
The transport strategy provides for institutional reforms: withdrawal from the market of those state enterprises, which do not execute state functions. But the State will participate as a shareholder in major companies, on which stability of the market’s individual sectors depend.
In order to ensure the security of the transport process as well as to restore the basic infrastructure specialized enterprises and control bodies are being formed. The state unitary enterprises Rosmorport and Administration of the Moscow aviation center’s airports have already been established. It is planned to set up similar structures in the system of managing all aviation and inland water transport. They will take care of modernizing airports, water areas, inland water routes and navigation systems.
"To achieve goals set by the strategy will require doubling investments in the transport complex", says Sergei Frank. "The highest rates of increasing state investments will be needed in the freeway sector, in arranging border checkpoints, modernizing airports, creating modern systems of transport security and sea shipments of energy carriers", he points out.
The strategy assumes the combination of special-purpose budget funding and attraction of non-state funds. The federal budget for 2004 makes it possible for the first time to emit domestic special-purpose loans on state guarantees. This will permit to direct free funds to finance transport projects that will be commercially recouped. Inflows of investments will be also promoted by creating attractive conditions for registering transport businesses and means of transportation in Russia on the basis of the Russian international marine list of ships.
The priority areas of the private and state partnership are concessions with respect to toll roads and city transport, modernization of ports and airports as well as creation of free economic zones at the largest transport centers. Attracting investments will require improvement of the infrastructure of the financial market, creation of conditions for using banking capital in long-term crediting of transport projects.
Sergei Frank
Russian minister of transport. 43 years old, was born in the city of Novosibirsk. Graduated from the Naval Academy of Engineering and Commercial Institute with the All-Union Academy of Foreign Trade. Studied at the University of Transport and Foreign Trade in Marseille (France). Besides, has lawyer’s diploma from the Far Eastern State University.
In 1989 started working at the Far Eastern Office of Steam Navigation. From 1991 to 1995 was its deputy general director for economy and finances. In 1995 began working at the Russian ministry of transportation as deputy director of the marine transport department. In 1996 became deputy minister.
In March 1998 was appointed Russia’s minister of transportation. Chairman of transport conferences of CIS member countries.