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Russia to build up positions in Asia-Pacific region, modernizing the longest world railway

August 01, 2013, 16:40 UTC+3 Zamyatina Tamara

MOSCOW, August 1 (Itar-Tass) - Russian President Vladimir Putin has set an ambitious task to modernize Russian railway lines, the longest in the world, including a legendary project of Soviet times - the Baikal-Amur Mainline (BAM), not yet completed. Russia is contemplating a major project of the 21st century, which should build up the country’s positions in the Asia-Pacific region and increase many times the amount of freight shipments from Asia to Europe.

The project concerns the Trans-Siberian Mainline, briefly named Transsib, which is stretching from Moscow to Vladivostok for 9,288.2 kilometres. The Trans-Siberian Mainline is the longest network of railways in the world, running through Europe and Asia. The aggregate length of Transsib and the Baikal-Amur Mainline, which is the 4,000-kilometre-long Transsib branch line, exceeds the diameter of the Earth.

“Comprehensive development of the Trans-Siberian Mainline should realize the potential of eastern territories of the Russian Federation, should help upgrade their industrial base, put into use new deposits of natural resources and should strengthen Russia’s status as a vital member of the continental transportation system,” Russian President Vladimir Putin said at a meeting with members of the government on July 26 - comments putting a focus on Western Siberia and Urals resources of hydrocarbons and other natural resources, the largest in the world.

Russia plans to raise substantially the throughput capacity of the Baikal-Amur Mainline. Target throughput capacity of renovated railway lines is set at 165 million tonnes of cargoes annually. But this is not the limit of Russian ambitions. Minister of Development of Siberia and the Far East Viktor Ishayev reported on plans to build a second spur of the Baikal-Amur Mainline that will connect Sakhalin Island and the mainland by means of a bridge. This railway line will be extended to Korea and China.

Currently, freight shipments from Asia to Europe are being made primarily by sea, around Africa and through the Suez Canal.

“There was no life in the Far East without the railway. Coming reconstruction and modernization of the Baikal-Amur Mainline and the Trans-Siberian Mainline will increase substantially the transit potential of Russia,” State Duma deputy and Doctor of Historical Sciences Vyacheslav Nikonov said in an interview with Itar-Tass, noting project hurdles ahead. “The cost of shipments is the highest one in the world on Russian railways," he said. "This factor can discourage freight shipping companies. Russian customs services slow down seriously the cargo clearing. Clearing at the ports of Shanghai, Singapore, Hong Kong is done in a few hours, but it takes several days in Russia. This is impermissible for efficient freight traffic.”

The massive Transsib-BAM project offers an opportunity to fulfil the Russian presidential decree issued in the previous year to create 25 million highly productive jobs by 2020 in Russia. This decree raised some doubts among many experts contemplating which facilities can employ a quarter of Russia's able-bodied population. Now it is becoming clear that they can be employed on a network of railways stretching for over 13,000 kilometres, where the specialists of different professions will be needed. During the Great Depression of 1929 to 1939 in the United States, for example, the number of unemployed people involved in the construction of roads, channels and bridges reached four million.

For implementation of the new project, the Kremlin intends to spend a massive sum of 562 billion roubles - about 18 billion U.S. dollars or over 13 billion euro, the Russian president noting that this sum “is absolutely not enough for such sweeping projects, this is start-up capital.” Most important was that these monetary funds will be used for this concrete purpose and will not be stolen over the long period of time the project will be implemented.

Russia does not plan to attract foreign investments yet. “Russia has much money. We are investing throughout the world ourselves. Russia has invested 120 billion dollars in U.S. securities, thus supporting the U.S. economy,” State Duma deputy Vyacheslav Nikonov said. “The money should be invested in the domestic economy.”

“The Far East has a quite moderate share in the socio-economic potential of Russia that makes about five percent in terms of population and GDP. Its main value, and this value is enormous, is that for Russia this is the gateway to a huge and rapidly developing world region, conventionally named the Asia-Pacific region," said geography professor at Moscow State University Leonid Smirnyagin in an interview with Itar-Tass. "It is also of no less importance that potentially this is also the gateway for Western Europe to a promising region,”

Russia “has a growing hope that transcontinental transit will bring about some kind of California Gold Rush in the Far East. To say the least, it will reverse a tendency to decline that resulted in the Far East losing more than one fifth of its population for the years of Russian independence,” said Smirnyagin, former adviser to late first Russian President Boris Yeltsin and who has made expeditions to many Russian regions. “It would not be worth making haste with implementation of the project because Russia's neighbours, primarily China and Kazakhstan, are developing actively similar projects for the connection of Europe with the Pacific.”