The railway infrastructure enhances economic development

Feb 18th, 2010 | Category: Articles, February10

In recent years, the governments’ agenda in Central and Eastern Europe, Central Asia and the Caucasus region, which define the Wider Black Sea Area, focused mainly on various programmes for railway infrastructure capacity development. Modern governments play a pro-active role in the day-to-day management of their economies. To that effect, one of the economic objectives is to implement an active policy in order to ensure a proper transport infrastructure which, in its turn, will ensure and support the social and economic requirements of a country. Hence, the railway infrastructure could be divided into two categories: productive infrastructure and social infrastructure.

In regards to the development of a modern railway transport infrastructure, some of the countries in Central and Eastern Europe received the support of the European Commission through the allocation of non-reimbursable funds to finance investments. These countries implemented national investment programmes for the railway infrastructure, because this way they can ensure their connection to the Trans-European Railway Transport Network (TEN-T) and, implicitly, to the countries in Western Europe. The countries in Central Asia and in the Caucasus region applied the same method; they implemented various investment programmes, most of which with state or TRACECA financing. This shows a real involvement in developing their connection with Europe. A significant role in the development of the railway infrastructure networks was held by the implementation of the TACIS programme during 2000-2006, which led to the elaboration of partnership and cooperation agreements between the European Union, Central Asia and the and the Caucasus region.

The infrastructure needs political support

The governmental policies adopted in recent years seem to bring an ascending evolution for the railway infrastructure, which no longer holds the third place in the preferences of the population and of large project developers. Moreover, the railway infrastructure is beginning to outrun road and air transport, which until now seemed to be its unbeatable rivals.

Surely, maritime transport was and continues to be a key player on the European and Asian transport market. However, there are two factors which determine the diversification of the transport routes and the opening towards new surface transport routes between Europe and Asia. The first factor is the virtual monopole held by maritime transport, which, for now, is only a source of problems in terms of surface transport access to the Black Sea ports. The second factor is the need to satisfy the demands for regional trade, which is in full development on the Europe-Asia corridors.

An economic analysis elaborated by the International Transport Forum (ITF) shows that, in certain cases, the surface links between the two continents can provide a viable alternative to maritime transport, they can significantly improve access and also take over part of the freight volume carried, especially container traffic.

However, developing surface links between the two continents raises a series of problems which could be overcome only through a proper joint decisional policy for every member state of the Wider Black Sear Area, such as the development of proper transport infrastructure and the elimination of the legislative or institutional obstacles which prevent the development of efficient transport services.

Joint policies

The countries in the Wider Black Sea Area are different. However, in recent years, especially after the fall of the communist bloc, a joint policy on railway infrastructure development began to surface. The countries in Central and Eastern Europe benefit from a direct surface link with Western Europe and can easily establish rail links with the Trans-European Transport Network (TEN-T). They benefit from many support and consultancy programmes from the Western countries, which are more advanced in the field of railway transport infrastructures. On the other side of the Black Sea, the railway infrastructure in Central Asia and in the Caucasus region focused mainly in the Soviet space, with very few rail links to the Black Sea ports.

In recent years, the countries part of the Wider Black Sea Area continued to support the railway infrastructure and to establish joint practices for the development of trans-continental routes. However, the creation of Europe-Asia corridors by building proper infrastructures makes sense only in case of the transport services that can be provided and which aren’t affected by a series of obstacles which limit the conditions of operation or render them less competitive compared to maritime transport.

Although, at first sight, road transport seems to be the most reliable means for linking the two continents (possible low construction costs, the relief prevents the construction of railways), it is very important to mention the policies developed by the European Commission, together with UNECE (United Nations Economic Commission for Europe) and ESCAP (United Nations Economic and Social Commission for Asia and the Pacific), for ensuring a better coordination for the extension of the main trans-European transport axes to the neighbouring countries and regions; it is also important to mention the activity undertaken by UNECE/ESCAP, who supported the development of Europe-Asia transport links.

According to an analysis elaborated by the International Transport Forum and published in an official document, an analysis on the costs of railway transport calculated for Europe, if the rolling stock is efficiently used and operated six-seven hours a day and, if possible, create trains with a higher number of wagons, the costs of railway transport could be significantly reduced on longer distances. These are, obviously, efficient cases for the transport routes that cross countries such as Russia or for developing transport from one side of the Asian countries to the other, over distances of thousands of kilometres. In such cases, the costs of railway transport could be less than 10 or 12 euros per train-km, which would attract a cost of less than EUR 2,000 per load, or even less, depending on the length of the train, in order to connect the two extreme points of the Eurasian continent.

The Black Sea and Caspian Sea ports play a decisive role in the Wider Black Sea Area. That is why it is extremely necessary to invest in the development of new rail links that can take over freight traffic, especially in order to provide alternatives to road transport. Hence, the railway infrastructure becomes the best guarantee for expanding the port hinterland. Most countries make efforts to connect the ports and the railway networks in order to increase railway capacity and the quality of the services provided. In fact, this idea reappeared at the same time as the proposals to create European railway freight transport network, so that the port services linked directly to this network could take over a large part of the freight traffic.

Europe and Asia, pro-railway

At present, the only transcontinental projects for railway transport are the well-known Trans-Siberian route and the TRACECA Corridor, which is still under construction. The latter includes some of the most well known cross-border projects, whose finalization is long awaited and which will bring a faster, less expensive and eco-friendly link between Europe and Asia. More precisely, we are talking about the Marmaray Tunnel, which is currently under construction. This tunnel will cross underneath the Bosphorus strait and it will be finalized in 2012. The second largest project is the Baku-Tibilisi-Kars rail link, which replaces the link to Central Asia through Armenia and which links three different countries on the railway map: Azerbaijan, Georgia and Turkey (Turkey is a major gate to Europe). The presidents of the three countries discussed about the possibility to link the Baku-Tibilisi-Kars directly to Europe, starting 2011, by connecting it to the Marmaray Tunnel. This link would be the shortest, safest and fastest rail link for freight transport between Asia and Europe. The construction works on the Baku-Tibilisi-Kars rail link are going on schedule. “Works in Georgia and Turkey are going on schedule. The line will enter service by the end of 2011”, announced Gurban Nazirov, chief engineer of Azerbaijan Railways.

A few examples of national and trans-national projects

Russia is going to invest EUR 6.3 Billion in 2010. On December 2009, RZD approved the investment programme and the associated financial plan for 2010, as well as the development programme by 2012. RZD plans to allocate RUB 855 Billion by 2012, of which 270 Billion (EUR 6.3 Billion) in 2010 in order to ensure the modernisation or construction of new railway infrastructure. The projects developed directly by the company will receive RUB  644 Billion.

The plan includes the project for the construction of a highway and a railway line in mountain resort Adler. The project is called “Alpika Service” and it will benefit from a state financing of RUB  60 Billion. The projects included in the strategy are divided into: projects made through concession, which focus mainly on of kilometres. In such cases, the costs of railway transport could be less than 10 or 12 euros per train-km, which would attract a cost of less than EUR 2,000 per load, or even less, depending on the length of the train, in order to connect the two extreme points of the Eurasian continent.

The Black Sea and Caspian Sea ports play a decisive role in the Wider Black Sea Area. That is why it is extremely necessary to invest in the development of new rail links that can take over freight traffic, especially in order to provide alternatives to road transport. Hence, the railway infrastructure becomes the best guarantee for expanding the port hinterland. Most countries make efforts to connect the ports and the railway networks in order to increase railway capacity and the quality of the services provided. In fact, this idea reappeared at the same time as the proposals to create European railway freight transport network, so that the port services linked directly to this network could take over a large part of the freight traffic.

Europe and Asia, pro-railway

At present, the only transcontinental projects for railway transport are the well-known Trans-Siberian route and the TRACECA Corridor, which is still under construction. The latter includes some of the most well known cross-border projects, whose finalization is long awaited and which will bring a faster, less expensive and eco-friendly link between Europe and Asia. More precisely, we are talking about the Marmaray Tunnel, which is currently under construction. This tunnel will cross underneath the Bosphorus strait and it will be finalized in 2012. The second largest project is the Baku-Tibilisi-Kars rail link, which replaces the link to Central Asia through Armenia and which links three different countries on the railway map: Azerbaijan, Georgia and Turkey (Turkey is a major gate to Europe). The presidents of the three countries discussed about the possibility to link the Baku-Tibilisi-Kars directly to Europe, starting 2011, by connecting it to the Marmaray Tunnel. This link would be the shortest, safest and fastest rail link for freight transport between Asia and Europe. The construction works on the Baku-Tibilisi-Kars rail link are going on schedule. “Works in Georgia and Turkey are going on schedule. The line will enter service by the end of 2011”, announced Gurban Nazirov, chief engineer of Azerbaijan Railways.

A few examples of national and trans-national projects

Russia is going to invest EUR 6.3 Billion in 2010. On December 2009, RZD approved the investment programme and the associated financial plan for 2010, as well as the development programme by 2012. RZD plans to allocate RUB 855 Billion by 2012, of which 270 Billion (EUR 6.3 Billion) in 2010 in order to ensure the modernisation or construction of new railway infrastructure. The projects developed directly by the company will receive RUB  644 Billion.

The plan includes the project for the construction of a highway and a railway line in mountain resort Adler. The project is called “Alpika Service” and it will benefit from a state financing of RUB  60 Billion. The projects included in the strategy are divided into: projects made through concession, which focus mainly on infrastructure modernisation for the Olympic Winter Games organised in Sochi and which benefit from 50.6 Billion rubles; infrastructure modernisation projects developed directly by the company and which will receive RUB 103.5 Billion; the modernisation of the RZD locomotives – RUB 38 Billion; the development of wide transport areas, such as the “Oil transport in China”, “Development of Tobolsk-Surgut area”, “Reconstruction of the Baskunchak-Aksarakaya area” – RUB 8.3 Billion.

The port of Tallinn (Estonia) is interested in building a cargo terminal for Kazakhstan for the transport of oil products, coal, metal and grains, informs Kazakhstan Today, citing the press service of development of wide transport areas, such as the “Oil transport in China”, “Development of Tobolsk-Surgut area”, “Reconstruction of the Baskunchak-Aksarakaya area” – RUB 8.3 Billion.

The port of Tallinn (Estonia) is interested in building a cargo terminal for Kazakhstan for the transport of oil products, coal, metal and grains, informs Kazakhstan Today, citing the press service of the Ministry of Transport and Communications in Kazakhstan. The port of Tallinn has shown interest in investing in the construction of a freight terminal in order to create a special economic area. This offers Kazakhstan the possibility to access the European markets without requiring an intermediary. Moreover, Estonia is interested in establishing tariffs for railway freight transport near the terminal. “We would require around EUR 24 Billion to develop railway transport in the area. Kazakhstan Railways, together with the Ministry of Transport, have to develop a programme for railway development in order to attract foreign investments by 2020”, declared Ermek Kizatov, company vice-president, for Kazakhstan Today, in November 2009.

In 2009, the capital of Kazakhstan, Astana, began the construction works on the railway line that is going to link Kazakhstan and Turkmenistan with Iran and the Persian Gulf. The total length of the line will be of 677 km and it will be distributed as follows: Kazakhstan – 137 km, Turkmenistan – 470 km and Iran – 70 km. In Iran, this line will link the railway network leading to the ports and the Persian Gulf. “Turkmenistan has already begun the works on its railway section. This line will be the fastest, the most cost-efficient and the most important transit route for the countries involved in the project”, declared, in December 2007, Gurbanguly Berdimuhamedov, president of Kazakhstan. In April 2009, Turkmenistan finalized the construction of 150 km of track. The project is implemented simultaneously in the three countries. The line is scheduled to enter service by the end of 2011. This railway line will link the city of Uzen (in the west of Kazakhstan), Gyzylgaya-Bereket-Etrek (in Turkmenistan) and it will have as terminus point the city of Gorgan (in the province of Golestan in Iran).

On March 13, 2009, Turkish Prime Minister Recep Tayyip Erdogan, officially inaugurated the Ankara-Eskişehir high-speed line, where trains can run at a speed of 250 km/h. The travel time between the two cities was reduced from 3 hours to 1 hour 30 minutes. Turkey wants to develop a high-speed network and this is its first major project. “The infrastructure for another high-speed line between Ankara and Konya has been finalized, and services will begin in 2010. The construction works on the Ankara – Sivas high-speed line have been initialized. This line will later on be extended to reach Kars. As for the Baku-Tibilisi- Kars line, works are going on schedule”, said Turkish Minister of Transport Binali Yildirim. The Ankara-Konya line will be 306 km long. Other similar links are scheduled to be developed between Ankara and Izmir.

Starting 2016, the Ministry of Transport in the Czech Republic plans to rehabilitate the railway network and build high-speed railway lines for trains that can run at a speed of 360 km/h. According to the projects developed by the ministry, the high-speed lines should link the largest regional capital of the country, such as Prague and Brno, Ostrava (north Moravia), Liberec and the north of Bohemia and Hradec Kralove and Pardubice (both in east Bohemia) and Plzen (west Bohemia) and Ceske Budejovice, Jihlava and Karlovy Vary. The authorities in Pec pod Snezkou, Spindleruv Mlyn and Svoboda nad Upou plan to initiate a project for the construction of a line that links the three cities and Karpacz (Poland) through a tunnel in Sniezka Mountain. The project is called Upa Express 2020 and the works are scheduled to begin this year. The value of the project amounts to EUR 1 Billion for the Czech Republic and EUR 200 Million for Poland. The Czech government decided to invest around CZK 8 Billion (EUR 311 Million) in the railway sector, every year for the next seven years.

In 2010, Azerbaijan will continue the infrastructure projects for the development of links between Russia, Georgia and Iran. “All the infrastructure projects have to be continued in 2010. Of course, this will bring new investment programmes”, said Ilham Aliyev, President of Azerbaijan. According to him, the construction of the Baku-Tibilisi-Kars will continue this year as well.

Serbia will benefit from investments for the Belgrade-Bar railway line and for the infrastructure in the port of Bar (Montenegro). However, the finalization of Corridor 10 is a top priority”, said Dragoslav Sumarac, President of the Chamber of Engineers. He added that Serbia could us its port and the port of Bar, thus making a profitable business. The location of the port of Bar on Corridor 11 is very important to establish a connection with South-East Europe, the Balkans, Italy and North Africa. “Investing in the railway infrastructure would be profitable”, concluded Dragoslav Sumarac.

Ukraine is considering the rehabilitation of several railway routes for the Euro 2012 Football Championship: Kiev-Dnipropetrovsk, Kiev-Donetsk, Donetsk-Dnipropetrovsk, Kiev-Lvyv, Kiev-Kharkiv and Kiev-Odessa. Ukraine will also introduce high-speed trains, modernise the Poltava-Korystivka line so it can take over the freight traffic and build a bridge over the Dnieper river to Kiev. The reconstruction of the Beskyd tunnel will be made with EBRD funds, following a loan taken out in 2003. A single-track tunnel, with a length of 1.747 m, it was located on one of the most crowded transport routes (Corridor 5) and it disrupted traffic. The tender for the reconstruction works has already been organised. “Ukraine, Belarus and Lithuania plan to cooperate for the development of the transport infrastructure”, announced, in December 2009, the Ukrainian Minister of Foreign Affairs, Petro Poroshenko. Representatives from the three countries discussed about improving railway communication by building new lines. The Ukrainian government asked the Ministry of Transport and Communications, the State Customs Service and the Administration of the State Border Guard Service to guarantee the construction of a new container route at Dnipropetrovsk-Lisky railway terminal. The construction works will take place during 2010-2015. The Ukrainian government also gave instructions to increase the capacity of the Odessa-Lisky terminal.

Belarus is ready to build a railway section in Turkmenistan”, announced Alexander Seleznev, Minister of Architecture and Constructions in Belarus, on January 25, following the visit of Gurbanguly Berdimuhamedov, President of Turkmenistan, at Minsk Arena, informs BelTA.

“The heads of the two states discussed the possibility of signing a contract for the construction of a 150 km north-south railway section in Turkmenistan. In the near future, experts from Belarus will visit Turkmenistan” to discuss the project”, said Seleznev.

This way, Belarus Railways will install automated and telemechanic equipment on several railway sections in Turkmenistan.

Bulgaria’s priorities in terms of transport are all presented in the SOP-T document, which was approved by the European Commission and which requires the distribution of structural and cohesion funds. The Bulgarian SOP-T has five priority axes. The first axis refers to railway infrastructure development along the TEN-T axes, and the third axis concerns the development of freight and passenger intermodality. Until October 31, 2009, 34 contracts had been signed for 36 of the projects approved. Two of the beneficiaries of these projects are NKZI and Metropolitan. BDZ EAD and BDZ Cargo submitted a proposal to the government, which presents concrete measures for the development of intermodal terminals: first of all establishing a legal and institutional framework, then se-veral measures concerning the construction of the terminal in Sofia and a temporary solution for the improvement of the old terminal. CREAM supports the development of an intermodal terminal network in South-East Europe, the core of which would be Sofia.

In January 2010, Iranian company Pars Energy signed a contract for the construction of a new railway line in Turkmenistan. This project has a value of USD 650 Million. This line would link Atrak and Barkat; it would be 325 km long and it would also be connected to the railway networks in Turkmenistan and Kazakhstan. The Iranian company will have to finalize the project in two years’ time. “Islamic Development Bank (IDB) will loan Turkmenistan USD 325 Million (50%), the rest being financed by the Iranian company”, said Ambassador Mohammad Reza Forqani.

During a meeting held at the end of 2008 in Tehran, Uzbekistan and Iran signed an agreement for railway cooperation. The provisions include: the development of a transit container rail link between Almaty (Kazakhstan), Tashkent and Istanbul; the launch of a railway container service between Tashkent şi Bandar Abbas (Iran); a 25% discount for Iran for the use of wagons from Uzbekistan; Iranian train transit on the railway network in Uzbekistan and settling the accounts between the two railway companies. Underlining the fact that the two countries have always had a good cooperation in the railway field, Hassan Ziyari, CEO of Iranian Railways, said that “setting up private transport companies and investing in the launch of rail links between Iran, Afghanistan and Uzbekistan will allow Uzbekistan to have access to the Persian Gulf.”

In Georgia, Kontur won the tender for the construction of the Akhalkalaki railway station, which should be finalized in 2011. Georgia has resumed the construction works on the Baku-Tibilisi-Kars railway line in March 2009. As part of this project, 105 km of track will be built, of which 76 on Turkish territory and 29 in Georgia. In order to increase railway capacity to 15 million tones per year, Georgia will build 183 km of the Akhalkalaki-Marabda-Tibilisi railway line.

The fact that the countries in Central and Eastern Europe, as well as those in Central Asia and the Caucasus region give a great deal of importance to the railway transport sector is one more advantage for the development of this mode of transport, as well as the fact that these countries focus on the development of national and cross-border railway routes.

by Elena Ilie

Comments are closed.