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Yakutia-Magadan railroad construction cost estimated at $26 billion

In 2021, a special expedition studied thoroughly the future construction, and presently specialists of the institute of transport’s economy and development are planning investments

YAKUTSK, June 7. /TASS/. The construction of a railroad between Yakutia and Magadan is estimated at 1.6 trillion rubles (26 billion), Yakutia’s Minister of Transport and Road Infrastructures Vladimir Sivtsev told TASS on the fringes of the Road to Magadan conference.

Earlier, the national railroad monopoly, RZD, said a railroad to Magadan could be built before 2035. Presently, a railway line finishes in Yakutia’s Nizhny Bestyakh.

"According to preliminary estimations, the construction cost of a railroad from Niznny Bestyakh in Yakutia to Magadan will be 1.6 trillion rubles, but its economic effects will be twice or three times bigger," the minister said. "The confirmed deposits [of natural resources along the railroad] are estimated at 5.2 trillion rubles ($85 billion). The project’s implementation will offer jobs both on the railway line - up to 1,500, and when investment projects are implemented - up to 8,000 jobs."

In 2021, a special expedition studied thoroughly the future construction, and presently specialists of the institute of transport’s economy and development are planning investments.

Project options

According to presented materials, RZD has chosen a variant of the railroad, which will be 1,979 kilometers long. The construction may take 12 years. The project includes the construction of a 3-kilometer bridge across the Aldan River in Yakutia.

"The financial model will be eyed by the Russian government and the regions, as well as RZD, without ruling out a public-private partnership mechanism," RZD’s Deputy Director General Vasily Frolov said.

Yakutia’s authorities also see as quite possible the variant of a public-private partnership. "It is a working instrument," Yakutia’s Prime Minister Andrey Tarasenko said pointing to the positive experience of the Elgaugol Company (a part of Albert Avdolyan’s A-Property).

The company has begun the construction of a railway line near Chumikan (the Khabarovsk Region) in the Sea of Okhotsk’s Uda Bay to transport coal from the Elga deposit in Yakutia.

The construction of a railroad between Niznyi Bestyakh and Magadan has been in strategic development plans, including in the national program for the Far East’s social and economic development to 2024 and further on to 2035, and in the national transport development plans.

The conference participants stressed the formation of an all-season supporting transport network will provide favorable conditions for the integration of Yakutia and the Magadan Region into the country’s economic space and into the Asia-Pacific Region. Quite promising would be using the railway line for the gas processing industry, which has been emerging in Yakutia, Andrey Tarasenko said, adding the region still has certain potential to export coal and iron ore products.

Social effect

A new railway line will cut costs of year-round deliveries to the Northern regions, and will make the logistics easier. It will accelerate the social and economic development of the Far Eastern regions and will improve their transport accessibility.

"Making products cheaper is a key task to improve the quality of life. In addition, we are talking about increasing transport accessibility. The construction of a new railway line will create new unique opportunities both for the development of the economy and for the development of the social sphere. Our territories will not depend on the Arctic river navigation, winter [seasonal] roads, and thus cargo deliveries will be cheaper and the Northern deliveries will have easier logistics," said Grigory Smolyak, Director of the Department for Social Development of the Far East and the Arctic at the Ministry for the Development of the Far East and the Arctic.

Alexander Akimov, Deputy Chairman of the Federation Council’s Committee on Federal Structure, Regional Policy, Local Self-Government and Northern Affairs, shares this opinion. "Following President Vladimir Putin’s order, we have been working to restore the northern deliveries system," he said. "We expect a respective bill during the autumn session. The northern deliveries system will cover 25 regions. The construction of the railway line to Magadan will cut the northern deliveries’ costs, and will make those deliveries undisrupted."

About conference

The Road to Magadan conference took place in Yakutsk on June 4-5.