• 2013 July 27

    Russian President Vladimir Putin

    On the development of Trans-Siberian Railway and Baikal-Amur Mainline

    - The load on the rail network (Trans-Siberian Railway - Ed.) has increased to the limit and there have been the so-called bottlenecks on the way. All this hinders economic activity in Eastern Siberia and the Far East, restricts the transit capabilities of our country.

    Integrated development of the Transsib can unlock the full potential of the eastern territories of the Russian Federation, to help upgrade their industrial base, to put into circulation new mineral deposits, strengthen the status of Russia as a key element of continental transport system.

    Yet it is clear that along with the modernization of the Trans-Siberian Railway it’s urgent to significantly boost the capacity of the Baikal-Amur Mainline (BAM). I would remind you that the expansion of these mainlines was built into the Master plan of the development of Russian railways.

    I know that there are several ideas on specific mechanisms of modernization both Trans-Siberian Railway and the BAM…
    First. We should clearly define the scope and directions of future freight flows on the Trans-Siberian and the BAM. New transport capacities should be in demand and fully meet the requirements of the growing Russian economy.

    Today, the major shippers on the East direction are mineral companies. To make railroads operate efficiently, provide a progressive development of new deposits it is necessary to coordinate the activities of all participants in this process, all participants in this project.

    I would emphasize again: the issue of tariffs of promising freight traffic, its scope and directions should be clear already at this stage, the planning stage. It is also very important what are the legal instruments and agreements we need here, and have to start to discuss it.

    Next. Integrated development of the BAM and the Trans-Siberian Railway is impossible without strengthening of the associated infrastructure. We are talking about putting into service of new generating units and transmission networks, ports, border crossing points, access roads and so on. All of these activities must be carefully planned and calculated.

    In this regard, I would ask you to prepare an update scheme of the Transsib and the BAM and related infrastructure and to conduct an independent technical audit of the scheme.

    Third. To implement the project we need a strict business plan and realistic financial model. It is obvious that the ambitious plans for overhaul of the Transsib and the BAM it will require not only significant public investments and injection of private capital. As I have already mentioned, one of our main goals is to attract investors in large infrastructure projects.

    To encourage the investors to take such a decision, they need to know the key parameters of these projects. Everything should be transparent here: the expected operational flow, volume and sources of funding, and the terms of raising funds, including those from the National Welfare Fund.

    I would point out that we must carefully construct the organizational scheme of modernization of these two mainlines – both the BAM, and the Trans-Siberian Railway, carefully calculate the project payback and return on investments, the payback period. I propose to involve an independent financial adviser who, will be selected on a competitive basis by the Government of the Russian Federation. Also, I charge the Government to prepare on the basis of our discussion a detailed schedule of next steps for these projects.

    Quoted from the shorthand report of the meeting on the modernization of the Trans-Siberian Railway, which took place July 26, 2013.

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