Russia – China: Way to Europe

03.05.2007 (14:36)

2007 year is announced a year of China in Russia. Vadim Morozov, First Vice-President of OAO RZD,  tells about prospects of the development of railway freight transportation between Russia and China.

-  Mr Morozov, what is the role of railway transport in the RF-China communication? What are the results of OAO RZD at that section?  

- Railway transportation makes 80% of total freight transportation. It is important to improve logistic, that is one of the priority divisions. Speaking on the stats, the 2000-2006 dynamic is impressive. Thus, total volume of transportation between two countries rose nearly twofold (24 mln tons in 2000 and 47 mln tons in 2006). Export increased merely twofold as well (22.6 mln tons in 2000 and 43.8 mln tons in 2006). Import increased 2.8 times (from 1.1 mln to 3 mln). Transit transportation reduced from 637.4 thousand tons to 253.7 thousand tons. 

In 2006 volume of transportation from China increased by 8.2% year-on-year.  In January-March 2007 volume of freight transportation increased by 17.4% year-on-year. Raw materials and mass freights make the base of the freight flow. In particular: timber (35.4% of total volume, oil freights (24.4%), mineral fertilizers (15.2%), ferrous metals and iron ore row materials (9.2% and 5.3% respectively).  

- Is it possible to enlarge of Russia – China freight flow? 

- Transportation of the freights, mentioned above, is to increase further. Meanwhile, transportation of ferrous metals reduced slightly, as China itself started to export ferrous metals.  Visit of the RF delegation, headed by V. Putin, Russian President, (March 2006) impulsed development of cooperation between two countries. A list of important documents was signed, including  agreement on joined usage of large capacity containers while transporting export-import freights  and agreement on e-data exchange at the international railway transportation segment. More than that, Russian-China border stations and railway approaches were modernized and reconstructed in order to serve the required volume of freights which follow to and from Russia to China. Railway routes are being improved further in 2007. Russia invests RUR 8.7 bln for the development of railway infrastructure. China also improves its infrastructure. 

Railway transportation of oil to China will reduce after construction of Eastern Siberia - Pacific Ocean is completed. OAO RZD plans to compensate reduction of oil transportation on the cost of the other types of freights.  Development of metallurgical complex of China will lead to increased demand for iron ore. It is possible to deliver it from Chita region. 35 mln tons of ore will be extracted annually by 2015 according to the forecasts. Rise of export transportation of timber from Maritime territory and fertilizer export from Ural region is expected as well. Export of timber will reach 20 mln tons, fertilizers – more than 3 mln tons by 2015 according to the forecasts.  

It is possible that demand for power station coal will rise. Russian export of power station coal may reach 5 mln tons according to the forecasts.  

It is also important to say that transportation of freights from China to Russia is to raise as well, especially transportation of containers. China exports light industry products, glass products, machine building and agriculture production. Nowadays one mln tons of export-import freights is being transported to and from China. Transit of containers may reach 3-3.5 mln tons.  

There is a list of perspective agreements with different companies, such as IKEA, and car production companies, such as KIA Motors, Volkswagen, Great Wall Motors. Those companies plan to transport their products by Trans Siberian Railway.  More than that, loading of boarder station will depend on volume of bilateral trade between China and European countries.  

- Transportation of freights to and from China reduced in recent years. What are the main measures for stimulation of that freights flow? 

 - Transportation of ferrous metals from Kazakhstan to China reduced. At the same time trade between China and European countries rises constantly, it makes about 60 mln tons nowadays. Oil freights and other raw materials make the majority of all those freights. 25% of those transportation can be provided via Russian Railways (that makes 14-15 mln tons, including 8-9 mln tons of container freights).  We have set a list of targets which will increase volume of freight transportation.  

Nowadays agreements on development of transportation from China to Germany via Russian territory are being actively developed.  Heads of railways of all those companies agreed on joint development of container transportation along the Trans Siberian Railway and creation of logistic company. Representative office of OAO TransContainer will start operating in China in 2007.  The main goal is development of transport infrastructure which meets the modern situation at the development of transport. We have already created conditions for the development of transit transportation.  

It is also important to improve a system transportation and usage of logistic methods at the management system.  

Cooperation with the other transport sections (motor transport, shipping companies etc) is important as well. OAO RZD, Russian Troika transportation company and Far Eastern Shipping company plan to develop business on the base of logistic principles. Construction of sea container terminal at the Far East, construction of  on land terminal at the center of Russia are expected. Thus consignor and consignee will get a through service, which meets the modern requirements. 

 by Tatiana Tokareva 
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