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Northern Latitudinal Railway to offer new jobs in Russia's Yamal

December 13, 2017, 11:55 UTC+3 MOSCOW

Russia will use the concession model for the first time in this railroad construction

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MOSCOW, December 13. /TASS/. Launch of the new 700-meter long Northern Latitudinal Railway (NLR) in the Yamalo-Nenets Region will offer new jobs at the railroad and at the region’s new deposits and processing plants. The project will favor settlement of many local problems and will speed up development of the Arctic, Yamal’s Governor Dmitry Kobylkin told TASS.

On November 29, Russia’s President Vladimir Putin at a meeting with staff of a Moscow railway station called the NLR a promising project, which will "give a new impetus to development of the Russian Arctic and to the Northern Sea Route."

"We shall organize new jobs both on the railroad and in the neighboring sectors - at new deposits, development of which would be economically effective with the new railroad, and at new processing plants, which will be profitable due to the NLR," the governor said.

Benefit for Yamal

Investors have been coming to Yamal for its natural resources, but recently the deposits are either stabilizing or even cutting production. The region’s development will continue with shifting the industrial centers further to the north, to the Yamal Peninsula, where transport infrastructures are not developed yet.

"The Northern Latitudinal Railway is the railroad of 707 kilometers," the governor said. "This transport corridor will connect the Northern and the Sverdlov railroads and will be used to take cargo from new deposits in the Yamal Peninsula’s northern areas. <…> The estimations say the project’s cost is more than 200 billion rubles ($3.3 billion)."

The new railroad in Yamal will boost the energy effectiveness of natural resources’ extraction and of cargo handling. Besides, NLR will offer year-round transport communication between Yamal’s cities.

"NLR will cut the distance to Russia’s European part, will make cargo transportation quicker, will optimize work of RZD (Russia’s railway giant) and will connect the region’s major settlements," the governor said. "It will be a big input in settlement of the transport problem in Yamal. Using the new railroad, people, who live in the region’s cities and villages, will have a year-round transport connection."

First railroad concession

Russia will use the concession model for the first time in this railroad construction.

"Under this model, we shall consider interests of a wide range of the project’s participants, we shall attract private investments under good conditions and will use RZD’s most advance technical and operational solutions," the governor added.

Besides RZD, the project’s participants are Gazprom, the Russian Federation and a company, which RZD will organize specially for this construction.

"For every party, depending on form of its participation, the payback term would be different," the governor continued. "For example, for RZD it would be about ten years <…> Under the signed agreements, by 2025, the carriages will be serving about 24 million tonnes of cargo a year."

The region undertakes co-financing of the most complicated bridges, including a bridge across the Ob River. "The region will invest in the project about 8 billion rubles ($135 million)," the official said.

Access to the Arctic Ocean

A logical continuation of the NLR would be a railway line, connecting Bovanenkovo and Sabetta - another 170 kilometers. The Sabetta port is close to most promising shelf deposits of Rosneft and Gazprom. According to the governor, if a railway line gets to the Sabetta port, it would become the easternmost sea port on the Northern Sea Route.

"With construction of this passage, we are getting a direct access by the Northern and Sverdlov railroads to the Arctic Ocean," Governor Kobylkin said. "Thus, we are getting a base for development of the richest mineral base in the region, including the Kara Sea’s shelf; we thus are getting a direct access to international export markets in Europe and the Asian-Pacific Region along the Northern Sea Route, and thus the railroad will make conditions to open high-tech processing facilities on the Yamal Peninsula."

About the project

The Northern Latitudinal Railway is 707 km of a rail line, connecting Yamal with Uralsk and with Russia’s North-West. The railway will also connect the national transport systems via the Sabetta seaport with the Northern Sea Route. In October, 2016, RZD (Russia’s railway giant) and government of the Yamalo-Nenets Region agreed the future latitudinal railway project. For RZD, it would be the first concessional project ever. The construction is due to begin in 2018, to be completed in 2022.

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