OREANDA-NEWS.  November 15, 2012. "This year has seen accelerating growth in transport shipments to seaports. Shipments between January and September increased by some 11%, compared to just 3.5% last year, mainly to the ports of the North-West Basin," said Salman Babaev, Vice-President of Russian Railways, reported the press-centre of Russian Railways.

Babaev was speaking at the conference "Transport Infrastructure: Modernising Railways and Ports", which began in Moscow in the framework of the VI Exporail International Specialised Exhibition.

In 2011, the volume of freight shipped by rail to Russia’s sea ports increased by more than 5% to almost 229 million tons, with more than 93 million tons passing through the country’s northwest ports, almost 75 million tons via the ports of the Far East and more than 60 million tons going through the ports in Russia’s South.

According to forecasts, shipment volumes are set to increase further. In accordance with the parameters of the Master Plan, if GDP shows average annual growth of 3.5%, rail transport will need to increase loading volumes by nearly 500 million tons to meet the economy’s demand for transport by 2020, while freight volume on the Russian Railways’ network will amount to more than 1.9 billion tons.

However, Salman Babaev underlined that "the infrastructure is not ready for such a massive increase in loading volumes and freight exports through the ports."

With the increase in freight volume, the length of bottlenecks can increase to 14,500 kilometres by 2015 and to 19,200 km by 2020, which will represent a major barrier to the country’s economic development.

The possibilities available to Russian Railways on the basis of its projected financial plan and investment budget will not allow the Company to implement fully the measures in the Master Plan. The shortfall in the investment budget deficit by 2020 is estimated at 2.1 trillion roubles, a very large sum which Russian Railways cannot provide on its own.

It is advisable to fund a number of infrastructure projects only from budgetary sources, since the state budget will be able to return the invested funds as a result of the budget multiplier effect.

The possible options for financing such projects include proposals to introduce an investment component into the tariff, provide direct investment from the state or other public funds, or increase the budget financing of railway projects in targeted federal programmes.

"Without state support for rail transport, the parameters laid down in the Strategy 2030 will not be achieved. Without sufficient funding for the development of rail transport, the targeted sectoral indicators in the strategic programmes, whose implementation is directly related to the development of rail transport, will have to be revised downwards," noted Babaev.