Multi-track restoration

The North-West is likely to become one of the most fast-developing regions in Russia in terms of cargo transportation growth. In particular, experts say railway transportation to the North-Western port is to grow by almost 2.5 times to 175.3 million tonnes by 2015.

Major approaches

One of the main investment priorities of Oktyabrskaya Railway (OZD) is the development of long-distance railway approaches to ports. Major cargo routs include those ensuring cargo delivery to the seaports of the Baltic and the North Basins: the east-west route (Koshta – Volkhovstroi – St. Petersburg) being used for delivery of cargo from Central Russia to St. Petersburg hub and to the ports of the Baltic Basin (St. Petersburg, Ust-Luga, Vysotsk, Vyborg) as well as the north route (Volkhovstroi – Belomorsk – Murmansk and Malenga – Belomorsk – Murmansk) being used for delivery of cargo to the ports of the North Basin (Murmansk, Vitino, Kandalaksha).

According to the forecast of Viktor Stepov, Head of OZD, by 2015 the majority of cargo (58.3 million tonnes) will be transported to the port of St. Petersburg, some 55 million tonnes – to the port of Ust-Luga, 40 million tonnes  - to Murmansk and 12 million tonnes to Primorsk. If the capacity of Primorsk does not change by 2020 the volume of cargo transportation to other ports will grow: Ust-Luga (+72.7%), St. Petersburg (+21.8%) and Murmansk (+50%).

East-west

As of today the highest cargo load falls on Koshta – Volkhovstroi – St. Petersburg section, which has two “barrier” places: Babayevo station and Volkhovstroi junction. To decrease the load of the above sectors it was decided to build an additional yard and to complete construction of a track around Volkhovstroi junction by the end of 2008.  Besides, there is a decision to build the third main track to raise the capacity of Volkhovstroi – Mga section as well as the forth and the fifth track at Mga – Gory section and the third track at Gory – Izhory section.

However, it will be not enough after 2010 considering the forecasted growth of cargo flow. Thus the program of OZD envisages the measures aimed at infrastructure improvement at a secondary route Sonkovo – Mga. It will provide reserve capacity for delivery of cargo to the ports of the Baltic Basin.

Ports of the Gulf of Finland

The port of Ust-Luga demonstrates the fastest development. Today there are three terminals in the port – coal, ferry and multi-purpose. Initially, the volume of 36 million tonnes was forecasted to be reached by 2010 though OZD says it is to be achieved by the end of the current year.

That is why one of the most significant infrastructure projects of Oktyabrskaya Railway id the development of Luzhskaya port station and Mga – Gatchina – Veimarn section. In 2007, investment into the above section totaled RUR 5.4 billion while in 2008 it will make RUR 13.7 billion to be spent for construction of the second track, upgrading of Mga and Gatchina stations as well as for improvement of electricity supply and installation of new autoblocking and communication systems.

As for attraction of outward investment into the railway infrastructure, the pilot project was that aimed at the development of near approaches to Vysotsk-Lukoil port based on the principle of Private-Public Partnership realized by RZD and Lukoil. As early as in 2007 the cargo flow to the port totaled 12 million tonnes. However, almost exhausted capacity of St. Petersburg-Vyborg section and planned launch of high-speed passenger service between St. Petersburg and Helsinki prevent further growth of cargo flow to Vysotsk-Lukoil port.

That is why cargo flow to the ports of the northern side of the Gulf of Finland will be transferred to a Priozersk route with construction of a new double-track line Petyayarvi – Kamennogorsk and the second line at Kamennogorsk – Vyborg section. The project as a whole is valued at RUR 79.7 billion. Considering the project’s international significance and capital intensity RZD asked the government for a state support. In 2007, governmental committee approved the project financing through the RF Investment Fund to the amount of 35%. Experts say the project’s pay-back period for both the company and the budget will make 10 years provided that it is supported by the state in 2008-2010.

Northern  route

Both sections of the northern route of OZD (Malenga – Belomorsk and Volkhovstoi – Belomorsk – Murmansk) operate at the edge of their capacity. The first section has only one track and the second one has multiple single-track insets. There are also a number of intermediate stations with insufficient length of receiving-and-departure tracks, which limits their capacity. The above problems are to be solved through implementation of the program.

Development of Murmansk transport hub

At the territory of the port of Murmansk it is planned to upgrade the existing coal terminal with introduction of up-to-date unloading technologies. For implementation of this project OZD program envisages reorganization of a freight yard at Murmansk station with a compensative reconstruction of a sorting yard and reconstruction of port station Kola.

Besides, on the west side of the Kola Bay it is planned to build a 28 mln tonne coal terminal (Kuzbassrazrezugol) and a 35 mln tonne oil terminal (Sintezpetroleum). To ensure the delivery of cargo to the above terminals it is necessary to upgrade Vykhodnoi station, which is to become a railway junction, and a 9-km Vykhodnoi run, as well as to build a new electrified railway line Murmashi-2 – Lavna (27 km) and port station Lavna.

For implementation of Murmansk transport hub development strategy Managing Company Murmansk Transport Hub OJSC was set up in late 2007. It was incorporated by Murmansk Commercial Seaport OJSC (40% of the authorized capital); Russian Railways OJSC (25%); oil company Rosneft (15%); RosMorPort FSUE (15%) and Murmansk region administration (5%).

Besides, Murmansk region is going to participate in a competition announced by the RF Ministry of Economic Development in order to create a special economic port zone with a free customs regime and tax privileges. Such a form is to demonstrate efficiency of state and business joint work on infrastructure development projects.

Cargo flow logistics

Export-import cargo flows transported by Oktyabrskaya Railway then go to either Russia seaport or to a railway border crossing and then to a foreign seaport.

Both logistical chains are applicable considering economic interests of the railway. However, it is important to know a perspective distribution of cargo flows for the development of a railway infrastructure.

“In view of state interests it is evidently more preferable to transport cargo via Russian seaports,” Viktor Stepov said at an International Investment Forum “Russian Ports. Investment Opportunities and Financing Strategy.” Such a supply chain is more efficient as it has only one junction with a Russian port unlike the other chain including both the border crossing and a foreign port”.

However, European ports have more favorable geo- and meteorological conditions (deeper approaches and better weather). To improve the competitiveness of cargo transportation via Russian port it is necessary to develop infrastructure, to simplify cargo clearance and to reduce port charges.