The Comprehensive Plan for the Development of the Transport Infrastructure will hugely contribute to the economic development of the country

30 november 2018 | Pult Upravleniya

By its very nature the transport industry is a kind of procuring system: without a solid rail, road, port etc. infrastructure, economic development is pretty much impossible, according to Analytical Center expert Dmitry Chernenok.

Dmitry Chernenok
Dmitry Chernenok
Department for State-Run Programs and Budgeting

He told the "Pult Upravleniya" magazine about the role of the Comprehensive Plan for the Development of the Transport Infrastructure. "The transport industry makes a significant contribution to the development of the country both directly and indirectly: the transport industry made up over 6.3% of the country's GDP in 2017, and that figure does not include construction and maintenance of the transport industry," Mr. Chernenok noted.

In addition, in recent years the Russian transport infrastructure has been quickly integrating with various transport corridors such as the Europe-Western China corridor, within which there is tough competition between maritime and overland deliveries. As Russian raw material companies are pivoting towards foreign markets, the Russian transport system is facing new challenges and that is especially true for Russian Railways.

The May Presidential Decree stressed the importance of developing the country's transport system, he noted. As part of the implementation of the Decree, a Comprehensive Plan has been developed for retrofitting and expanding of the transport infrastructure by 2024 with special attention being paid to the development of rail transport.

Russian Railways will have similar goals over the next few years with regards to its investment program, which constitutes an integral part of the Comprehensive Plan, the expert believes. "The main goals for Russian Railways through 2024 are set in four federal projects included in the Comprehensive Plan: Railway Transport and Transit, Transport between Centers of Economic Growth, High Speed Rail Lines, and Transportation and Logistics Centers," he noted.

The development of transport links between centers of economic growth and the creation of a high speed rail network will boost the mobility of the country's population and the investment attractiveness of agglomerative territories, mainly due to engaging people within two-hour transport accessibility and expanding labor markets, Mr. Chernenok believes.

"The Presidential Decree makes special mention of the need to develop the main railway lines of the country: the Baikal-Amur line and the Trans-Siberian line, which serve as the foundation for the development of the international East-West transport corridor. Their total capacity by 2024 should be at least 182 million tons, which is 1.5 times greater than what they can offer at the moment," he said.

Achieving the goals of the Comprehensive Plan by 2024 will allow the times of transit container deliveries along the West-East route and between Europe and Western China to be reduced significantly, primarily by increasing the speed of the container deliveries to 1,319 km/day, while also improving the transport accessibility of Russian regions.

The expert also pointed out that the goals and objectives of the Comprehensive Plan are closely aligned with the ambitious plans of consignors to expand exports and meet the expected increase in demand for transit container shipments. In this view, the top priorities for Russian Railways for the near future include the need to eliminate bottlenecks that total 8.1 thousand kilometers and expand infrastructure in conjunction with projects aimed at developing related modes of transport. In addition, development of the digital environment in rail transport should be continued so as to achieve greater benefits at less cost and boost the efficiency of the infrastructure, the expert believes.

The implementation of the measures of the Comprehensive Plan will make a colossal contribution to the development of the country's economy. For example, the retrofitting of the Baikal Amur rail line and the Trans-Siberian rail line alone and the construction of the VSM network will generate a significant increase in the country's GDP through both direct and indirect effects.

"The direct effects from these projects will come from an increase in the amount of cargo and passengers carried on those lines, reduced lead times and high capital expenditure during construction," Mr. Chernenok said. "Once the projects have been implemented, additional effects will come through improved transport accessibility for large areas, increase in market values and in the competitiveness of domestic products through lower costs and shorter lead times. This will create a favorable environment in which investors will be more interested in investing in various regions of the country and in investing in Russia in general."

Source: Pult Upravleniya