Silk and mortgage
The SPIEF 2017, St. Petersburg International Economic Forum dedicated to transport and logistics, was focused on the search of mechanisms to finance the infrastructure amid the budget deficit and on looking into drawing of cargo flows from seaborne transport to railways in the framework of Asia-Europe corridor.
One of the key drivers taken into consideration by many countries when developing their transport and logistics strategy is the New Silk Road project of China. The land route between China, APR and Europe, key cargo attraction centers in Eurasia, runs across the territory of Russia. Therefore, it is important to offer competitive transit. First of all, that will provide load for the railway and some seaports of Russia and will also allow for creation of logistics centers in the country.
As Oleg Belozerov, President of Russian Railways, said at SPIEF, transportation of some transit cargoes across the territory of the Russian Federation by rail is no less profitable now as compared with that by seaborne transport.
According to him, cargo delivery speed is an advantage of the rail transport. In the nearest time, Russian Railways are going to present a project of a high-speed line allowing for delivery of cargo within the shortest time. The head of Russian Railways also emphasized that a substantial contribution into the development of transit transportation had been made with introduction of e-declaration and pre-declaration, unification of documentation in different countries. That work is going on.
Besides, Oleg Belozerov sees prospects in establishment of global railway alliances, similar to those in the maritime sector.
Vladimir Yakunin, Ex-President of Russian Railways, who spoke at the SPIEF panel discussion, said that railway transport would not be able to compete with seaborne transport in terms of costs and volumes as the capacity of the largest boxships is 20,000 TEUs. The railways are competitive only when it comes to the time of delivery.
Evgeny Vinokurov, Director, Centre for Integration Studies, Eurasian Development Bank (EDB), said in his turn, that the development of railway corridors would let draw over about 4% of cargo from sea lines. In his opinion, those will be mostly premium cargo, about $50,000-$60,000 per container. That can be car components, electronics, cosmetics or food products. The time factor is significant for food and parcels. According to EDB representative, transportation of parcels by railways from China to the territory of the Eurasian Economic Union and Europe will develop if regular container trains are launched.
Evgeny Vinokurov said, the year of 2016 saw an increase of container transit by Russian Railways from China to Europe and back to 400,000 TEUs and 53,000 TEUs accordingly. Deliveries to China include BMW vehicle sets and Hewlett-Packard components.
According to EDB, to develop such transportation it is necessary to create logistics hubs for containers: 3-4 in Kazakhstan and 5-6 in Russia.
Meanwhile, Alan Lushnikov, Deputy Minister of Transport of the Russian Federation, forecasted that railway transit between Asia and Europe would make about 1 mln TEUs per year.
Infrastructure development is needed to implement the plans in the field of transport. Apart from debottlenecking of the railways it is necessary to build eco-friendly, deepwater dedicated terminals for transshipment of coal, mineral fertilizers and other cargoes. Special mechanisms should be developed for doing that amid the budget deficit. When speaking at SPIEF, Russian President Vladimir Putin proposed the development of so called “infrastructure mortgage” mechanism. The President said that creation of infrastructure facilities would be financed by private investors and their users would gradually refund the costs to the investors. “Payments can be secured through applying the instrument of state guarantees. It is about introduction of a sort of infrastructure mortgage when infrastructure facility is obtained through private investors’ loan and the user of the facility gradually pays back that loan,” said Vladimir Putin. The Government was instructed to elaborate such a mechanism.