China says will raise spending on railway construction by 80 percent in 2009 to $88 billion
BEIJING (AP ) — China will raise its spending on railway construction by 80 percent in 2009 to $87.9 billion as part of a stimulus plan to boost domestic demand, state media said Wednesday.
The official Xinhua News Agency said the figure of 600 billion yuan ($87.9 billion) for railway infrastructure projects was announced at a national railway meeting. The country spent $48.35 billion (330 billion yuan) on railway construction in 2008, it said.
The spending is part of a $586 billion (4 trillion yuan) stimulus package announced by the government in November.
Xinhua did not say how much of the spending was new money and how much was previously budgeted.
It quoted Railway Minister Liu Zhijun as saying 3,200 miles (5,148 kilometers) of new lines would be built in 2009.
Five high-speed passenger lines will also go into operation next year, Liu said. Most of the lines are in southern China.
Liu said 70 projects would be started in 2009 as part of a goal of easing a rail transport strain by 2012.
"There could be a historic change in the country's railway transport by 2012. The bottleneck restraints both in passenger and cargo transportation could be removed," Liu was quoted as saying.
Total railway lines could reach 68,000 miles (110,000 kilometers) in 2012, up from 48,500 miles (78,000 kilometers) at the end of 2007.
Xinhua said about 1.46 billion people traveled by rail in 2008, up 10.9 percent from the previous year. About 3.3 billion tons of cargo was delivered by rail in 2008, up 4.9 percent from 2007, it said.
Friday, 2 January 2009
The Toenail ridge garden railway
There can't be many people who can say honestly that they bought a house on the basis of its suitability for a garden railway.
We did.
I became interested in Large-scale a number of years ago, after having built a model kit of the General, and then buying an old Lima O-scale train-set at a garage sale.
The Lima was very European, very modern (ie. no coal or steam bits) and very big compared to the N models I was struggling to see at the time.
I had been experimenting with scratch-built O-scale bodies on HO trucks as a kind of psuedo-narrow-gauge, when it hit me that a 1:24th. model built on O-scale trucks would make a nice decoration.
Subsequently, I made a board-by-board model of a free-lance narrow-gauge box-car, mounted on the frame and trucks of the Lima German 90 ft. goods wagon.
It was an eye-opener to find in this scale that the doors could be made to slide and latch, the brake rigging could be modeled instead of just suggested, and that balsa wood planks looked like real wood planks, complete with scale grain and paint absorption.
Needless to say (I know I am speaking to the converted!), the N-scale rapidly got sold off and the Large-scale search was on!
One of the early shocks I'm sure we all experience when moving to G from the little stuff is the sheer cost of it in comparison.
I decided very quickly that this foray into G was going to be more a scratch-building procedure than a purchasing one.
Over a few months, therefore, the balsa box-car was joined by half a dozen other pieces of rolling stock and a very second-hand Bachmann radio-controlled 10-wheeler.
The original box-car had MDC G-scale trucks mounted in place of the O-scale Limas, and they all sat proudly on pressed tin track on top of the bookcases.
About this time, a bushfire threatened our house and property and the decision was made to sell the 15 acres and move back into the suburbs.
The fire was the final decider but we were also tired of the upkeep that a large property requires and also the commuting to work was becoming a strain, and of course, I couldn't find a good, reasonably level spot for a railway.
We began the search for a normal house and property in the suburb closest to our work-place and anyone who has run the gambit of the Open House merry-go-round doesn't need me going into any details here about what the next 6 months were like.
Every place we entered, my wife Kathy would head for the kitchen and I would head for the back yard.
Found some lovely kitchens with lousy yards and lovely yards with lousy kitchens and some with lousy everythings.
Eventually, the ideal place came on the market, perfect kitchen and disused, elevated rear garden
We did.
I became interested in Large-scale a number of years ago, after having built a model kit of the General, and then buying an old Lima O-scale train-set at a garage sale.
The Lima was very European, very modern (ie. no coal or steam bits) and very big compared to the N models I was struggling to see at the time.
I had been experimenting with scratch-built O-scale bodies on HO trucks as a kind of psuedo-narrow-gauge, when it hit me that a 1:24th. model built on O-scale trucks would make a nice decoration.
Subsequently, I made a board-by-board model of a free-lance narrow-gauge box-car, mounted on the frame and trucks of the Lima German 90 ft. goods wagon.
It was an eye-opener to find in this scale that the doors could be made to slide and latch, the brake rigging could be modeled instead of just suggested, and that balsa wood planks looked like real wood planks, complete with scale grain and paint absorption.
Needless to say (I know I am speaking to the converted!), the N-scale rapidly got sold off and the Large-scale search was on!
One of the early shocks I'm sure we all experience when moving to G from the little stuff is the sheer cost of it in comparison.
I decided very quickly that this foray into G was going to be more a scratch-building procedure than a purchasing one.
Over a few months, therefore, the balsa box-car was joined by half a dozen other pieces of rolling stock and a very second-hand Bachmann radio-controlled 10-wheeler.
The original box-car had MDC G-scale trucks mounted in place of the O-scale Limas, and they all sat proudly on pressed tin track on top of the bookcases.
About this time, a bushfire threatened our house and property and the decision was made to sell the 15 acres and move back into the suburbs.
The fire was the final decider but we were also tired of the upkeep that a large property requires and also the commuting to work was becoming a strain, and of course, I couldn't find a good, reasonably level spot for a railway.
We began the search for a normal house and property in the suburb closest to our work-place and anyone who has run the gambit of the Open House merry-go-round doesn't need me going into any details here about what the next 6 months were like.
Every place we entered, my wife Kathy would head for the kitchen and I would head for the back yard.
Found some lovely kitchens with lousy yards and lovely yards with lousy kitchens and some with lousy everythings.
Eventually, the ideal place came on the market, perfect kitchen and disused, elevated rear garden
Railways
Outright purchases and consolidations are supplementing thc "community of interest" in overcoming the disabilities imposed upon the transportation companies by the anti-pooling provisions of the interstate commerce law, and the anti-rate agreement provisions of the anti-trust law. This tendency is not new, but its development just now is certainly noteworthy.
Related Results
Railway wins case against website.(Deutsche Bahn )(Brief Article)
SAUDI ARABIA: SAUDI RAILWAYS 5-YEAR PLAN.(Brief Article)(Statistical Data...
Jack Simmons.(historian of British railways)(Brief Article)(Obituary)
MIDDLE EAST: CONFERENCE OF THE ARAB RAILWAY FEDERATION.(Brief Article)
Railway Supply Institute: one year and counting - supply side - Brief Article Among all of the rumors of consolidations with which the daily papers have been filled during the past week, the only reports positively confirmed are that control of the Central Railroad of New Jersey has been passed to the Reading Company, and that a considerable amount of stock of the Lehigh Valley, formerly owned by the Packer estate and by Lehigh University, has been bought by J.P. Morgan and his associates. Floating rumors point once more to the absorption of the Delaware & Hudson by the New York Central.
That these actual and possible amalgamations involve nothing new in theory or in practice may be repeated with emphasis. Significantly, too, demagogical attacks upon the capital invested in the public service in transportation have not been for a long time less frequent or less persistent. Railroad companies have been uniting with each other ever since the beginning of railway history. Capitalists have invested without number in parallel and competing, as well as in connecting, lines. Evidence that such unions of interest have proved detrimental to society is altogether wanting. Indeed, abundant proof exists that the evolution of the railway system up to the present highly concentrated form has constantly promoted economy of service, into the fruits of which economy, as seen in the uninterrupted cheapening of the cost of transportation, the people at large have entered.
Related Results
Railway wins case against website.(Deutsche Bahn )(Brief Article)
SAUDI ARABIA: SAUDI RAILWAYS 5-YEAR PLAN.(Brief Article)(Statistical Data...
Jack Simmons.(historian of British railways)(Brief Article)(Obituary)
MIDDLE EAST: CONFERENCE OF THE ARAB RAILWAY FEDERATION.(Brief Article)
Railway Supply Institute: one year and counting - supply side - Brief Article Among all of the rumors of consolidations with which the daily papers have been filled during the past week, the only reports positively confirmed are that control of the Central Railroad of New Jersey has been passed to the Reading Company, and that a considerable amount of stock of the Lehigh Valley, formerly owned by the Packer estate and by Lehigh University, has been bought by J.P. Morgan and his associates. Floating rumors point once more to the absorption of the Delaware & Hudson by the New York Central.
That these actual and possible amalgamations involve nothing new in theory or in practice may be repeated with emphasis. Significantly, too, demagogical attacks upon the capital invested in the public service in transportation have not been for a long time less frequent or less persistent. Railroad companies have been uniting with each other ever since the beginning of railway history. Capitalists have invested without number in parallel and competing, as well as in connecting, lines. Evidence that such unions of interest have proved detrimental to society is altogether wanting. Indeed, abundant proof exists that the evolution of the railway system up to the present highly concentrated form has constantly promoted economy of service, into the fruits of which economy, as seen in the uninterrupted cheapening of the cost of transportation, the people at large have entered.
New Delhi Railway Tenders
NEW DELHI: The Centre's policy of providing reservation to Scheduled Castes, Scheduled Tribes, Other Backward Classes and minorities in commercial contracts has come under Supreme Court scanner. The apex court has asked the Centre to explain why preferential treatment
A Bench comprising Justice BN Agrawal and Justice PP Naolekar on Monday admitted a petition challenging the government's preferential treatment to such groups in the name of affirmative action while awarding catering tenders within the world's largest commercial and utility employer. The court issued notices to the Centre and others on the plea of Railway Catering Contractors' Association.
The court also directed continuation of its interim order. It had restrained the railway authorities from finalising the tenders. However, they could invite the bidding. Senior counsel Harish Salve, who appeared for the petitioner association, termed the government policy of extending reservation on matters of purely commercial transaction as "illegal and unconstitutional".
The court wanted to know from Attorney General, Milon K Banerjee, who represented the Centre, that under which provision of the Constitution, the government was going ahead with its reservation policy concerning purely commercial transactions. The court then glanced through the constitutional provisions that deal with government power on quotas. But it wondered if such a policy can be extended in the economic realm.
"Article 16 provides for reservation in public employment. Article 15 (5) deals with policy of reservation in education. Similarly, the state is empowered to come up with special provision for the advancement for SCs, STs and OBCs," the SC noted. "But does awarding of commercial contracts fall within any of the above-mentioned articles?" it asked.
Furthermore, the court took exception to the policy of reservation to the minorities in the government's commercial transactions. "Under which constitutional provision, you (Centre) are giving preferential treatment to minorities in commercial matters?" the court sought to know from the country's top law official.
When the AG replied that the government contracts were related to the services, the court said services and matters related to services were two different things. The AG also cited the Bombay High Court verdict relating to the dismissal of the plea of the appellant association. The court maintained that the issue had come up before it perhaps for the first time, as pointed out by Salve, and it wanted to know which constitutional provision allows reservation on commercial matters.
Following the query, the AG sought time to file reply. The court granted six weeks to the Centre and others while admitting the petition. Mr Salve then drew to the court's attention that the issue in question was significant and has come up for the first time before it. Though Balco case has economic undertones, it's mainly confined to the mining matter, Mr Salve contended.
A Bench comprising Justice BN Agrawal and Justice PP Naolekar on Monday admitted a petition challenging the government's preferential treatment to such groups in the name of affirmative action while awarding catering tenders within the world's largest commercial and utility employer. The court issued notices to the Centre and others on the plea of Railway Catering Contractors' Association.
The court also directed continuation of its interim order. It had restrained the railway authorities from finalising the tenders. However, they could invite the bidding. Senior counsel Harish Salve, who appeared for the petitioner association, termed the government policy of extending reservation on matters of purely commercial transaction as "illegal and unconstitutional".
The court wanted to know from Attorney General, Milon K Banerjee, who represented the Centre, that under which provision of the Constitution, the government was going ahead with its reservation policy concerning purely commercial transactions. The court then glanced through the constitutional provisions that deal with government power on quotas. But it wondered if such a policy can be extended in the economic realm.
"Article 16 provides for reservation in public employment. Article 15 (5) deals with policy of reservation in education. Similarly, the state is empowered to come up with special provision for the advancement for SCs, STs and OBCs," the SC noted. "But does awarding of commercial contracts fall within any of the above-mentioned articles?" it asked.
Furthermore, the court took exception to the policy of reservation to the minorities in the government's commercial transactions. "Under which constitutional provision, you (Centre) are giving preferential treatment to minorities in commercial matters?" the court sought to know from the country's top law official.
When the AG replied that the government contracts were related to the services, the court said services and matters related to services were two different things. The AG also cited the Bombay High Court verdict relating to the dismissal of the plea of the appellant association. The court maintained that the issue had come up before it perhaps for the first time, as pointed out by Salve, and it wanted to know which constitutional provision allows reservation on commercial matters.
Following the query, the AG sought time to file reply. The court granted six weeks to the Centre and others while admitting the petition. Mr Salve then drew to the court's attention that the issue in question was significant and has come up for the first time before it. Though Balco case has economic undertones, it's mainly confined to the mining matter, Mr Salve contended.
Railway Construction
The North Luzon railway, currently under construction from Metro Manila to Northern Luzon, is essential and necessary to the economic progress and prosperity of the Philippines, said Arsenio M. Bartolome III, President and Chief Executive of North Luzon Railways Corporation (Northrail).
He appealed to the public to support the project as it would benefit millions of Filipinos, including commuters, farmers, traders, workers and students, who would profit from the cheap and fast mass transportation system.
Bartolome explained that once Northrail becomes operational, it would accomplish four objectives: 1) it would provide fast, cheap and reliable mass transport services for passengers and goods from Metro Manila to Northern Luzon; 2) it would enhance and accelerate the development and growth of Central and Northern Luzon; 3), it would decongest motorized traffic in Metro Manila; and 4), it would provide linkages to the MRT and LRT light rail systems.
Bartolome added that the construction of the railway would also afford employment to hundreds of Filipinos, and benefit thousands of farmers by providing them with cheap access to markets.
Bartolome said that the Northrail was conceptualized in 1994 during the term of President Fidel Ramos. But it was only during the term of President Gloria Macapagal Arroyo when the project was firmed up with the signing of an executive agreement with the Peoples' Republic of China.
Under the agreement, the PROC shall design, supply and construct Phase 1 of the Northrail project. PROC designated China National Machinery and Equipment Corp (CNMEG) to handle the design, supply and construction of the project while the Export Import Bank of China takes care of its financing. Contracts and loan agreements have been finalized and signed and the construction has begun last month.
The project is divided into four phases -- Phase 1 from Caloocan to Clark Field, Pampanga; Phase 2 from Clark Field to Subic Bay; phase 3 from Caloocan to Fort Bonifacio, Taguig City, and Phase 4 from Clark Field, Pampanga to San Fernando, La Union.
According to Bartolome, Northrail will utilize the existing right of way of the Philippine National Railway (PNR) from Caloocan all the way to San Fernando, La Union. This right of way of PNR had been abandoned for more than 30 years.
Bartolome commended the National Housing Authority under the leadership of Vice President Noli de Castro for effectively and efficiently clearing all the informal settlers on the PNR right of way from Caloocan to Malolos, paving the way for the start of the construction. He described the two phases of the construction as follows:
Phase 1 is subdivided into two sections, namely, section 1 from Caloocan to Malolos, and section 2 from Malolos to Clark Field, Pampanga. The project cost for Section 1 is $ 421 million while Section 2 would cost $ 586 million.
The track length from Caloocan to Malolos is 32.5 kilometers with six stations located in Caloocan, Valenzuela, Marilao, Bocaue, Guiginto, Malolos. Travelling time will be cut to 30 minutes. It will be used by 19 diesel multiple units which are upgradeable to electric multiple units. Some 125,000 are expected to use the trains for the first months. Expected completion is the first semester or 2010.
Section 2 from Malolos to Clark Field Pampanga, will cover a distance is 51.5 kilometers with six stations located Malolos, Calumpit, Apalit, San Fernando, Angeles City and Clark Field. Travelling time is 30 minutes and number of trains is 23 Expected completion is 2011.
He appealed to the public to support the project as it would benefit millions of Filipinos, including commuters, farmers, traders, workers and students, who would profit from the cheap and fast mass transportation system.
Bartolome explained that once Northrail becomes operational, it would accomplish four objectives: 1) it would provide fast, cheap and reliable mass transport services for passengers and goods from Metro Manila to Northern Luzon; 2) it would enhance and accelerate the development and growth of Central and Northern Luzon; 3), it would decongest motorized traffic in Metro Manila; and 4), it would provide linkages to the MRT and LRT light rail systems.
Bartolome added that the construction of the railway would also afford employment to hundreds of Filipinos, and benefit thousands of farmers by providing them with cheap access to markets.
Bartolome said that the Northrail was conceptualized in 1994 during the term of President Fidel Ramos. But it was only during the term of President Gloria Macapagal Arroyo when the project was firmed up with the signing of an executive agreement with the Peoples' Republic of China.
Under the agreement, the PROC shall design, supply and construct Phase 1 of the Northrail project. PROC designated China National Machinery and Equipment Corp (CNMEG) to handle the design, supply and construction of the project while the Export Import Bank of China takes care of its financing. Contracts and loan agreements have been finalized and signed and the construction has begun last month.
The project is divided into four phases -- Phase 1 from Caloocan to Clark Field, Pampanga; Phase 2 from Clark Field to Subic Bay; phase 3 from Caloocan to Fort Bonifacio, Taguig City, and Phase 4 from Clark Field, Pampanga to San Fernando, La Union.
According to Bartolome, Northrail will utilize the existing right of way of the Philippine National Railway (PNR) from Caloocan all the way to San Fernando, La Union. This right of way of PNR had been abandoned for more than 30 years.
Bartolome commended the National Housing Authority under the leadership of Vice President Noli de Castro for effectively and efficiently clearing all the informal settlers on the PNR right of way from Caloocan to Malolos, paving the way for the start of the construction. He described the two phases of the construction as follows:
Phase 1 is subdivided into two sections, namely, section 1 from Caloocan to Malolos, and section 2 from Malolos to Clark Field, Pampanga. The project cost for Section 1 is $ 421 million while Section 2 would cost $ 586 million.
The track length from Caloocan to Malolos is 32.5 kilometers with six stations located in Caloocan, Valenzuela, Marilao, Bocaue, Guiginto, Malolos. Travelling time will be cut to 30 minutes. It will be used by 19 diesel multiple units which are upgradeable to electric multiple units. Some 125,000 are expected to use the trains for the first months. Expected completion is the first semester or 2010.
Section 2 from Malolos to Clark Field Pampanga, will cover a distance is 51.5 kilometers with six stations located Malolos, Calumpit, Apalit, San Fernando, Angeles City and Clark Field. Travelling time is 30 minutes and number of trains is 23 Expected completion is 2011.
Wednesday, 17 December 2008
Rail Prospects for 2009
The UK Rail Industry - Job Prospects for 2009
Everyone who rides the rails knows things have not been the same since efforts have been made towards privatisation. In a scramble to make things work, companies have been struggling to find qualified workers to help run a smoother and safer system. Rail jobs in the UK have become one of the fastest growing needs to fill.
Parliament has created policies which allowed an investment towards upgrading the rail infrastructure throughout the United Kingdom in 2008. This has forced the creation of new rail jobs, many with fantastic opportunities for those interested in pursuing a career within the transportation sector.
The rail industry is in a tough position when it comes to finding qualified engineers and construction workers who contribute to a safe and reliable rail network. Jobs in the rail industry cover a wide range of skills and talents from janitorial and ticket agents to engineering and management.
Professional, technical, managerial and supervisory personnel are needed by the industry to train operators, consultancies, contractors and manufacturing companies to help the rail system safely function. These positions require advance degrees and some level of experience. Although university graduates can start out in some entry-level positions in management, the greatest need is for engineers, particularly with some experience.
Ever since the London rail bombings, there is a greater need for security and it creates a niche for those who can serve as safety agents prepared to deal with emergency and/or criminal situations. These positions are ideal for former military enlistees who have served in some form of security.
People are also needed to help maintain the structure and integrity of the rail system. Construction on the rail lines is an ongoing need to assure the safety of the trains running on the tracks and that the trains are in perfect order. With a bit of mechanical or construction background, you might find a position working outdoors on the rails.
Customer service issues rank as one of the biggest complaints for riders. Rail companies are in dire need of professional ticket agents who can process ticket purchases in a speedy and courteous manner. These agents also need to be prepared to handle questions and complaints without putting off the customers. It does not take an advance degree to fulfill the requirements, but it does take dedication.
For young people just out of school, janitorial and minor maintenance work at the rail station can lead to greater opportunities later within the industry. Stations need to be kept clean and safe which require a bit of effort that does not take a lot of skills or require a university education.
If you are looking for a job, consider the great opportunities offered in the rail industry. This is a career path that is going to be in high demand for a long time.
Everyone who rides the rails knows things have not been the same since efforts have been made towards privatisation. In a scramble to make things work, companies have been struggling to find qualified workers to help run a smoother and safer system. Rail jobs in the UK have become one of the fastest growing needs to fill.
Parliament has created policies which allowed an investment towards upgrading the rail infrastructure throughout the United Kingdom in 2008. This has forced the creation of new rail jobs, many with fantastic opportunities for those interested in pursuing a career within the transportation sector.
The rail industry is in a tough position when it comes to finding qualified engineers and construction workers who contribute to a safe and reliable rail network. Jobs in the rail industry cover a wide range of skills and talents from janitorial and ticket agents to engineering and management.
Professional, technical, managerial and supervisory personnel are needed by the industry to train operators, consultancies, contractors and manufacturing companies to help the rail system safely function. These positions require advance degrees and some level of experience. Although university graduates can start out in some entry-level positions in management, the greatest need is for engineers, particularly with some experience.
Ever since the London rail bombings, there is a greater need for security and it creates a niche for those who can serve as safety agents prepared to deal with emergency and/or criminal situations. These positions are ideal for former military enlistees who have served in some form of security.
People are also needed to help maintain the structure and integrity of the rail system. Construction on the rail lines is an ongoing need to assure the safety of the trains running on the tracks and that the trains are in perfect order. With a bit of mechanical or construction background, you might find a position working outdoors on the rails.
Customer service issues rank as one of the biggest complaints for riders. Rail companies are in dire need of professional ticket agents who can process ticket purchases in a speedy and courteous manner. These agents also need to be prepared to handle questions and complaints without putting off the customers. It does not take an advance degree to fulfill the requirements, but it does take dedication.
For young people just out of school, janitorial and minor maintenance work at the rail station can lead to greater opportunities later within the industry. Stations need to be kept clean and safe which require a bit of effort that does not take a lot of skills or require a university education.
If you are looking for a job, consider the great opportunities offered in the rail industry. This is a career path that is going to be in high demand for a long time.
Thursday, 11 December 2008
Russian Railways Rescue
An ambitious plan to rejuvenate Russia’s sprawling and antiquated railways will cost the country hundreds of billions of dollars, and the nation’s rail freight system is leading a hunt for new capital in London with this week’s listing of Globaltrans.
Globaltrans, the second-biggest freight operator after the state-owned Russian Railways (RZD), has tapped the London market for $449 million (£228 million), but its move is only the start of a huge and lengthy fund-raising, according to the Russian Government, which intends to privatise the business of freight carriage, to replace 20,000 locomotives, overhaul a railway network of 84,000km (52,000 miles) and eventually bring private capital into the passenger transport network.
Dealings in Globaltrans stock will begin this week, valuing the company at about $1.5 billion, but further corporate activity is expected later in the year when RZD spins off Trans-container in a public offering. A 15 per cent stake in the freight subsidiary of the national railway was sold to a consortium of investors, including the European Bank for Reconstruction and Development, Moore Capital and GLG, for eight billion roubles (£171 million) and RZD plans to offer a further 30 per cent of the stock in November. First Freight, another freight company from the RZD stable, will be sold off next year.
Russian railway bonds, an icon of Imperial Russia in the 19th century, may soon return as a feature of global capital markets. RZD has approved an 80 billion rouble capital-raising via bonds in the local market, but it has plans to borrow 325 billion roubles by 2010, including $7 billion in overseas markets to fund expansion and upgrading.
Russia’s rail network is the backbone of a country divided by distance. The profitable business of moving the nation’s mineral resources has been lumbered until now with the task of subsidising unprofitable services. RZD reckons that the cost of subsidising the passenger is 53 billion roubles a year. The Government wants to liberate freight, to enable it to invest and improve the commercial infrastructure. Igor Levitin, the Transport Minister, has said that the company needed to raise nine trillion roubles for rail transport to rejuvenate a system that had received no investment for 20 years.
The burden of passenger traffic is huge and, in a three-stage reform programme, it was decided to remove the freight cross-subsidy, to bring private capital into freight transport and to shift the burden of supporting passenger traffic to a direct state subsidy.
The first stage, the creation of a joint stock holding company for OAO Russian Railways (RZD), was completed in 2003. The second stage is under way, with the hiving off of commercial activities, such as freight, into profit-making ventures. The final step is the most complicated and politically difficult, since involves the rejuvenation of the passenger service and solving the subsidy dilemma.
Mr Levitin said that vast distances in Russia made passenger rail transport costly. “The longer you go, the cheaper it is [for passengers] by kilometre,” he said. “The Government is going to have to compensate for this difference.”
Private operators will be brought in to run new high-speed trains on shorter routes that might compete with air traffic, but introducing private capital to passenger transport must wait until after 2015. The priority is to get freight moving more efficiently and profitably. Eighty per cent of freight goes by rail in Russia and 60 per cent of passenger traffic.
Mr Levitin said: “Reform of rail transport is a very challenging task and we could do it faster, but it is the backbone and blood vessels of the country. There must not be hesitation, but we must not make mistakes.”
Globaltrans, the second-biggest freight operator after the state-owned Russian Railways (RZD), has tapped the London market for $449 million (£228 million), but its move is only the start of a huge and lengthy fund-raising, according to the Russian Government, which intends to privatise the business of freight carriage, to replace 20,000 locomotives, overhaul a railway network of 84,000km (52,000 miles) and eventually bring private capital into the passenger transport network.
Dealings in Globaltrans stock will begin this week, valuing the company at about $1.5 billion, but further corporate activity is expected later in the year when RZD spins off Trans-container in a public offering. A 15 per cent stake in the freight subsidiary of the national railway was sold to a consortium of investors, including the European Bank for Reconstruction and Development, Moore Capital and GLG, for eight billion roubles (£171 million) and RZD plans to offer a further 30 per cent of the stock in November. First Freight, another freight company from the RZD stable, will be sold off next year.
Russian railway bonds, an icon of Imperial Russia in the 19th century, may soon return as a feature of global capital markets. RZD has approved an 80 billion rouble capital-raising via bonds in the local market, but it has plans to borrow 325 billion roubles by 2010, including $7 billion in overseas markets to fund expansion and upgrading.
Russia’s rail network is the backbone of a country divided by distance. The profitable business of moving the nation’s mineral resources has been lumbered until now with the task of subsidising unprofitable services. RZD reckons that the cost of subsidising the passenger is 53 billion roubles a year. The Government wants to liberate freight, to enable it to invest and improve the commercial infrastructure. Igor Levitin, the Transport Minister, has said that the company needed to raise nine trillion roubles for rail transport to rejuvenate a system that had received no investment for 20 years.
The burden of passenger traffic is huge and, in a three-stage reform programme, it was decided to remove the freight cross-subsidy, to bring private capital into freight transport and to shift the burden of supporting passenger traffic to a direct state subsidy.
The first stage, the creation of a joint stock holding company for OAO Russian Railways (RZD), was completed in 2003. The second stage is under way, with the hiving off of commercial activities, such as freight, into profit-making ventures. The final step is the most complicated and politically difficult, since involves the rejuvenation of the passenger service and solving the subsidy dilemma.
Mr Levitin said that vast distances in Russia made passenger rail transport costly. “The longer you go, the cheaper it is [for passengers] by kilometre,” he said. “The Government is going to have to compensate for this difference.”
Private operators will be brought in to run new high-speed trains on shorter routes that might compete with air traffic, but introducing private capital to passenger transport must wait until after 2015. The priority is to get freight moving more efficiently and profitably. Eighty per cent of freight goes by rail in Russia and 60 per cent of passenger traffic.
Mr Levitin said: “Reform of rail transport is a very challenging task and we could do it faster, but it is the backbone and blood vessels of the country. There must not be hesitation, but we must not make mistakes.”
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