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RZD, NOVATEK agree on joint investments in Sverdlovsk railway infrastructure

October 24, 2011, 20:39 UTC+3

Under the accords, RZD will guarantee carriage of cargoes under certain charges

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MOSCOW, October 24 (Itar-Tass) —— The Russian Railways (RZD) company and one of Russia’s biggest independent gas producers NOVATEK have decided to invest jointly in an infrastructure of the Sverdlovsk regional railway.

According to NOVATEK’s CEO Leonid Mikhelson, his company plans to invest about 30 billion roubles (USD 1 = RUB 30.82) in the development of infrastructure at the Limgei-Tobolsk section of the Sverdlovsk Railway in 2012-2014.

RZD President Vladimir Yakunin, in turn, reminded to reporters that his company planned to invest about ten billion roubles (in the project). However, due to the delaying of the implementation of the Industrial Urals – Polar Urals project, NOVATEK put forth an initiative to co-finance the railway infrastructure.

Under the accords, RZD will guarantee carriage of cargoes under certain charges.

NOVATEK is Russia’s largest independent natural gas producer, and second-largest in overall production after Gazprom. The company was is based in the Yamal-Nenets Autonomous Area in West Siberia, and maintains sales office in Moscow.

The State-run Joint Stock Company, Russian Railways, is the world’s second largest network with 85,200 kilometres of track. It carries over 1.1 billion passengers and 1.1 billion tonnes of freight a year across eleven time zones.

RZD is Russia’s fourth largest company by revenues – over 41 billion U.S. dollars in 2008 (according to IFRS). It is one of the country’s most profitable companies, which exceeded 78.5 billion roubles in 2010. It employs over one million people. It comprises 987 enterprises and 165 subsidiaries.

RZD is responsible for 43 percent of Russia’s total freight traffic (including pipelines) and more than 41 percent of passenger traffic. The company is a major contributor to the fast-growing Russian economy. Its charter capital exceeds 1,698 billion roubles, which assets are estimated at more than 88 billion U.S. dollars.

The Industrial Urals – Polar Urals program is aimed at modernising the economy through resource and energy security and eliminating the lack of power generation in the Urals and Western Siberia.

The program envisages the use of global transport routes, such as the Trans-Asian transport route, the North Siberian latitude path and Northern Sea Route.

The project is expected to promote social and economic development of the Urals and Western Siberia, and make it possible to create new jobs.

Implementation of the Industrial Urals – Polar Urals project will make it possible to meet the demand of the Southern Urals in manganese and chromium ore, as well as ferrous and non-ferrous ore and many other raw materials.

In order to develop this “Russia’s Klondike of raw materials,” a railway line, a highway, new power plants and dozens of kilometers of electric transmission lines will be built along the Eastern slope of the Urals mountains.

Implementation of the mega-project that is expected to link the industry of the Southern Urals with natural resources of circumpolar areas will give a fresh impetus to the development of the entire federal district.

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