OREANDA-NEWS. June 06, 2012.  To attract new cargo and develop competitive advantages over other modes of transport, the railways have to cooperate successfully and harmonise the different systems in the EU member states and the countries in the CIS and Asia.

That is the conclusion reached at the strategic dialogue "Uniting Eurasia," which was held during the VII International Rail Business Forum 1520 Strategic Partnership, which began at the end of May 2012 in Sochi.

"The EU’s transport policy involves increasing freight turnover on the railways. Up to 50% of the freight delivered between 300-1000 km in 2050 should be carried by trains, not least to reduce the harmful impact on the environment," said Mikael Aro, Chairman of the Management Team at the VR Group Ltd (Finnish Railways).

At the same time, the annual volume of trade between Europe and Asia is estimated at USD 600 billion, but less than 1% of this trade is shipped by rail. The direct exchange of goods is made more difficult by the technological differences between the broad gauge track of 1520 mm used by the railway systems in Russia, the CIS countries, Finland and Mongolia, and the narrow gauge of 1435 mm used in Europe and Asia, as well as differences in legal systems.

The participants in the "Uniting Eurasia" strategic dialogue noted that the European Union devotes considerable attention to enhancing cooperation with neighbouring countries in the transport field and supports measures to switch freight to rail. One way of attracting new freight could be to realise the transit potential of the 1520 mm broad gauge system, which forms a natural land bridge between Europe and Asia.

"The most ambitious plan to develop rail infrastructure is the broad gauge project to Vienna," said Christian Kern, CEO of the ЦBB-Holding AG. This project involves the construction of a new railway line Koљice - Bratislava - Vienna with a total of length of between 390-430 km, depending on the final route chosen. Investment in the project is estimated at 6 billion euros, excluding the construction costs for the terminals and related logistics infrastructure and the cost of modernising the rail systems of the countries taking part in the project.

The participants in the strategic dialogue noted that when implemented, the project will form a single stable transport corridor with a total length of 10,000 km which will provide a highly efficient method of shipping freight between Europe and Asia and which will lead to an increase in global economic activity.

Such a project could serve as a model for improving the efficiency of cooperation in the development of common technical standards, technologies and the regulatory and legal system, noted the participants in the dialogue.

Straight-through freight transportation will also ensure that European goods can be delivered more easily and faster to the growing markets of Russia, Ukraine and Kazakhstan.

Nevertheless, implementing this plan requires extensive work to attract freight flows and investment, as well as the adoption of the appropriate policy and administrative decisions by the governments participating in the project.

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In 2009, railway companies in Austria, Russia, Ukraine and Slovakia set up a joint venture called Breitspur Planungsgesellschaft, which was registered in Vienna. The partners carried out a preliminary feasibility study on the construction of the railway infrastructure with a justification of the investment required and a model to attract the necessary funds.

The Austrian office of consulting firm Roland Berger Strategy Consultants was called in to help with this work.