Railway Industry: between import substitution and technology transfer

12.07.2010 (12:36)

Unlike many other companies, RZD satisfies almost all its technological requirements receiving new production from Russian machine-building enterprises. This confirms the tremendous impact of railway transport on related industries and its multiple influence on the entire economy of Russia.

This statement made by Vladimir Yakunin, President of RZD, set the tone of the debates during the 1st International Conference "Railway Industry: Priorities, Technologies and Prospects".

Mr Yakunin told that macroeconomic conditions were difficult in 2009 and 2010, therefore, unfortunately, RZD's investment program has been limited to cover depreciation only, which is slowing down the development of national railways and bringing risks to traffic safety. Also, usage of old equipment results in considerable additional costs, because it requires unscheduled repairs. Further on, the reduction in the acquisition of new equipment will bring a new wave of stagnation in the transport engineering sector, and there will be a shortage of rolling stock in railway transport.

What are the ways to overcome this situation? First and foremost - state regulation. However, Vladimir Yakunin's opinion is that the state policy to restrict the growth of natural monopolies' service tariffs should be based on a balanced approach. On one hand, economic development must be stimulated, restraining the growth of tariffs, on the other hand, RZD's investment programs should be supported, because this company is a large consumer of engineering equipment produced on the territory of Russia.

The recent assessment of RZD's investment program sequestration showed that a reduction of RUR 6 billion per year in locomotive purchase orders alone will result in a loss of tax revenue to all budgets of about RUR 2 billion. Also, the number of people employed in the manufacturing sector will fall by more than 2,500. Moreover, in this case, some factories will face the need to freeze production almost completely. If such extreme measures are taken, even for one year, it will require considerable expense and time spent later to restore normal working levels in enterprises.

Vladimir Gutenev, Vice President of Russian Engineering Union, believes that tariffs should include both investment and innovation costs. The modernisation of engineering in order to create high-tech production is the most important task set for the engineering community today. It is particularly important for railway engineering, as it is the basis for the technical upgrading of railway transport.

Mr Gutenev emphasised that there are innovative achievements in railway engineering. Nevertheless, there is no reason to talk about a serious technological breakthrough. The level of innovation adopted by railway engineering is still quite low. Single innovations do not considerably change the whole picture. Only large-scale enterprises which release high-tech production with high added value can make innovation competitive. And this is about the world market too. Mr Gutenev thinks that it is the largest and most sensitive point, because it requires solutions to many problems. First of all, it is necessary to establish a technological and regulatory framework.

Indeed, railway regulatory framework includes more than 5,000 national and industrial standards, therefore in order to revise it largely, it is necessary to adopt new railway technical regulations; to add articles to the Law "On Railway Transport in Russia", which would stipulate the necessary technical coordination of the new rolling stock with RZD as the infrastructure owner; to make additions to the Federal Law "On Technical Regulation" which would consider the mass appearance of new business entities on the railway transport market; to develop rules and regulations for the implementation of cutting-edge technical solutions; to improve the system of mandatory certification in railway transport; and to provide a multi-vector harmonisation of the national regulatory framework with the documents of the EU and the Asian region. One of the mechanisms to overcome the differences in legislation is intergovernmental agreements which regulate technical aspects in transport.

It is worth noting that, in accordance with the Development Strategy of Railway Transport in the Russian Federation to 2030 approved by the government, and in terms of maximal figures, it is necessary to upgrade 24,000 locomotives, about one million freight wagons, over 23,000 passenger cars and more than 24,000 carriages for electric and diesel trains. According to this document, the implementation of innovative breakthrough requires to rapidly develop and put into production a new modern line of electric dual power locomotives, energy-efficient cargo electric DC and AC asynchronous traction drive locomotives, etc.

In order to solve the problem of technological backwardness, it is necessary to better use the unique opportunities of transferring advanced technologies from abroad, with a high proportion of production facilities to be localised in Russia, said Vladimir Yakunin.

This topic raised serious debates at round tables and on the sidelines of the conference. For example, Stanislav Naumov, State Secretary and Deputy Minister of Industry and Trade, believes that the priority now is to increase the competitiveness of domestic enterprises through cooperation with foreign partners, primarily in locomotive building. It is necessary to find tools of the modern industrial policy, which would create a triangle between Russian manufacturers, foreign companies and customers. In his opinion, it is most important that new industrial enterprises should be created in Russia, rather than import substitution, and there should be a balance between integration of foreign know-how and best practices of Russian scientists.

Mr Naumov highly appreciates the efforts made by Russian enterprises, such as Transmashholding, to develop new projects at their own expense.

There are also successful examples of professional clusters, for example, in Sverdlovsk Region, where about 20 business units and 60 suppliers located in the Urals region are cooperating with each other. No doubt, this stimulates a new attitude of regional leaders to investment projects and creates new opportunities in the labour market.

The conference has adopted the resolution, which states that the management of NP UIRE is to apply to the Russian Government with concrete proposals to support the sector. For example, railway equipment industries have worked out peculiarities of technical regulation in railway transport to be used at the preparation stage of the amendments to the federal law "On Technical Regulation", and also to facilitate the development and adoption of federal laws "On Standardization" and "On Accreditation" with consideration of proposals made by the NP UIRE's expert committees.

It is also proposed to develop governmental measures to stimulate reduction in energy consumption of railway engineering industry and its production, and to create a mechanism of the government's subsidies and state orders for those joint ventures, which transfer and localise advanced foreign technologies in transport sector.

Inga Dmitrieva