16.02.2010 - 28.02.2010

The government decided not to revise the Russian Railways investment program for 2010

February, 27, Sochi. The Prime Minister Vladimir Putin visited the Southern federal district where he participated in the meeting to discuss how to implement and finance the Russian Railways investment program for 2010-2015. The discussion made clear that the government decided not to reconsider the investment program of the Russian railways for 2010.
Development and renovation of the infrastructure on basic transit and export-oriented lines are the guidelines of the Russian Railways investment policy. V. Yakunin, President of the Russian Railways, pointed out the key parameters for the development in 2010-2011. The total sum provided by the investment budget of the Russian Railways is 555,5 billion rubles. This includes 435, 5 billion rubles (78%) to be spent on the company’s investment projects in this period. Another 120 billion rubles will be spent on the construction of the combined road (automobile and rail) from Adler to the mountain climatic health resort "Alpika-service". The amount of 526 billion rubles of capital assets is said to be set in operation. Taking into consideration the current condition of capital assets, its renovation will be the company’s main priority for a short-term perspective. 72 billion rubles will be spent to buy new vehicles and 52 billion rubles – to buy locomotives.
As for the current year 2010, the investment budget of the Russian Railways is going to be 270,5 billion rubles which is 2,9 % more than in 2009. Meanwhile, the expenses on the implementation of the «Olympic» projects will raise significantly - by 51,8 % up to 71,8 billion rubles. The Russian Railways expects that the revenue from shipping operations in 2010 will be about 1,014 billion rubles (6,9% growth compared with the previous year). The expected level of the company’s expenses in 2010 is 974,5 billion rubles (which is 79,7 billion rubles less than last year). Following the results of 2010 V.Yakunin expects the net profit to be at the rate of 17,1 billion rubles which is eight times more than the expected rate for 2009.
In 2010 the carrier, as it has been planned, will get 50 billion rubles, including 23 billion rubles for the freight traffic, 19 billion rubles – to repair the infrastructure and 8 billion rubles for passenger transportation in compartment and second-class carriages on long-distance trains. 42 billion rubles will be assigned as an assessed contribution, and on the remained 8 billion rubles the Russian Railways will make a decision which will allow to transfer these money to the Federal Passenger Company.
In January, earlier this year, V.Yakunin, said that the Russian Railway investment program can be reduced in 2010 by 25 billion rubles. It was the question of cutting by half (from 50 billion to 25 billion rubles) of the state subsidies to Russian Railways for nonindexing the tariffs on freight transportation in 2010. Moreover, V.Yakunin complained that the investment program will have to be changed if these subsidies’ cuttings are introduced by the state.
In 2010 Russian Railways will be able to receive only 6 billion rubles from the «Rail transport» subprogram of the Federal goal directed infrastructure development program totaling 38 billion rubles. Thus the company said it won’t start any new projects but will continue those that have already been started. The increase of Far East ports’ capacity and the construction of the Kuznetsovsky tunnel are said to be priority goals for this year.
In 2010 the government will continue with the policy of tariffs’ restraint for railway transportation. It won’t however allow the economic collapse of the companies that are natural monopolies. In 2009 it was planned to raise tariffs on freight by 15,9 %, but in fact it only reached the level of 10,6 %. This year the plan is to raise tariffs on freight by 9,4 %.
In 2010 4,5 billion rubles will be invested in safety on railways. And it was highlighted during the meeting that the development of a railway infrastructure should be accompanied by investments in safety to supply the required level of antiterrorist and fire safety and to carry out the technical control over the condition of railroad tracks.
The sale of subsidiary’s shares should provide the means for development of the Russian Railways and the financing of key projects. Some experts consider that it will allow the Russian Railways to fill in the holes in the budget but not to grow or develop.
On February, 16th during the panel session «Development of the Russian Economy: Where investments are needed?» on the 12th annual forum Russia Business Roundtable the president of the company V.Yakunin said that till 2012 the Russian Railways plans to sell shares of more than 30 subsidiaries. This includes 50 % minus two shares of JSC Freight One and up to 35 % minus two shares of JSC Transcontainer that are planned to be sold during IPO. In addition, till 2012 50 % minus two shares of the companies JSC Elteza, JSC RZDstroy, JSC Kaluzhsky Plant Remputmash (which will receive the shares of six regional factories of Remputmash at first) will be put up for sale. Russian Railways also plans to sell control stocks (100 % minus one share) in a number of car-repair factories and in JSC Refservice. Shares of these companies are planned to be sold through private placements and auctions. Till 2012 Russian Railways plans to get a total sum of about 100 billion rubles for the subsidiaries’ and affiliated companies’ shares.
From the list mentioned above Freight One and Transcontainer are the most attractive assets. Containerized shipping has the great perspectives, taking in consideration Russian geographical position. These companies will therefore always be in demand on the market. Car-repair assets of the Russian Railways can also be interesting for strategic investors, especially for large private operators of freight cars. The assets of Elteza, Remputmash and RZDstroy are not as simple. They can be interesting only for profile investors. Refservice which is being sold almost entirely not as attractive while the cars are not produced for this company anymore and it now consist only of old vehicles.

The competitive bidding to design six new underground lines was announced in Saint-Petersburg

The transport committee of the government of St.-Petersburg announced a competitive bidding to design the routes and locate the position of six new underground lines. According to the government order of Saint-Petersburg, it will be possible to apply for the participation in the tender from February, 22nd, 2010. The maximum sum of the state contract will be 144 million 554,5 thousand rubles. The conditions of the competition say that participants should have the certificate issued by the self-regulated organization which allows working on the preparation of the planning organization’s ground area scheme, on the preparation for the construction and the license in force allowing to work with the state secret data. To participate in the competition applicants should provide 7,22 million rubles as a security for contract. The winner will have to provide 28,9 million rubles as a security contract. Applications will be opened on March, 31st this year.
In fact, it is the question of reserving those areas where according to the concept of the underground development till 2020, new stations should appear. Works will be carried out in Primorsky, Vyborgsky, Kalininsky, Krasnogvardeisky, Nevsky, Frunzensky, Moscovsky, Admiralteisky, Vasileostrovsky and Petrogradsky city districts. 30 weeks after signing the state contract is the maximum term to complete all the works. A contractor will be responsible for the schemes and the location of site areas of the main facilities to build Lahtinsko-Pravoperezhnaya, Frunzensko-Primorskaya, Koltsevaya, Kalininsko-Primrskaya lines and Krasnogvardeisky radius.
We should mention that the competition with similar conditions, but with the smaller initial sum of 128 million rubles was already announced in August last year. At the time, as well as now, the winner was to locate 56 halls of the 40 metro stations, and several dozens of air-ventilation mines. Almost an unknown company Inmar won the tender at that time. It asked for smaller sum, than JSC Lenmetrogipronrans, the traditional metro contractor, which designed all the existing stations of the St.Petersburg underground. The winner of 2009 disappointed the customer quickly enough. State Unitary Enterprise Saint-Petersburg Metro was not pleased with what Inmar was doing. Therefore it was decided to take the competition for the second time to find another contractor. Now Lenmetrogiprotransa obviously won’t have any serious rivals.
Some experts, analyzing the conditions of the competition, find it unnecessary to organize this kind of design and research works as all the spots for new stations have been known for a long time, and nothing special is being built somewhere near them. Therefore the designer has only one simple task - to map these spots. The terms for such a complicated work (only 30 weeks) implicitly prove this.
It’s quite surprising that the new competition implies the designing of the section from Komendantsky Prospect to depot Kolomjazhskoye that will simply duplicate the existing project for no good reason as the competition to design it has already been finished. The JSC LMGT won the project. The company had to make a full design of stations with concrete route development and to provide everything, including territory improvement. But now it turns out that «routing» for this section is ordered for the second time.
It is necessary to notice that JSC Lenmetrogiprtrans is now designing part of the Krasnoselsko-Kalininskaya line from the Obvodniy Cannel to the station Kazakovskaya. The cost of preparing all the necessary documentation for building this new line, is about 0,5 billion rubles. The works will probably last till 2011. The competition where the general designer of the Krasnoselsko-Kalininskaya line was chosen finished at the end of 2009. The project will include the construction of 4-6 new stations starting from the station Obvodniy Channel which is already under construction. The new line will cover the southwest creating new transfer centers at the stations Kirovskiy Zavod and Moskovskiye Vorota and putting thereby some kind of elements for the future ring line. The construction of the Krasnoselsko-Kalininskaya line will start after 2011.
The competition for designing new lines is a part of the city program of the underground development, accepted by the government of St.-Petersburg in January, 2008. This program implies the construction of 70 km new lines and 41 new stations. Cost of the program was estimated as 415,6 billion rubles two years ago, 220 billion was to be financed from the budget of St.Petersburg and 195,5 billion - from the federal budget. However, Vladimir Garjugin, the chief of the Saint-Petersburg Metro, said at the end of the last year that in 2010 underground construction will be financed only from the city budget with the total sum of 10,5 billion rubles. Thus, with the present scheme of financing the program can be implemented only in 41 years. In 2009 at the expense of all sources of financing, including federal, only 8,5 billion rubles were spent for the construction of new lines.