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PRESS RELEASE

April 18, 2014: The II Eurasian Conference "Logistics in Russia: Cooperation and the Technology of Development" was held at the Chamber of Commerce of the Russian Federation in Moscow on 17 April 2014.

The conference was attended by Salman Babaev, Vice President of Russian Railways, Sergei Aristov, Deputy Transport Minister of the Russian Federation, Sergey Katyrin, President of the Chamber of Commerce of the Russian Federation, and representatives from transport and logistics companies and associations.

"The effective exploitation of the transit potential of Russia's railways with regard to the development of sections along the international transport corridors (ITCs) passing through the territory of Russia is a strategic priority for Russian Railways," said Salman Babaev.

According to Babaev, Russia's geographical position allows it to claim the role of a transport bridge between Europe and Asia and between North and South in the world economic system.

To date, the main international freight traffic and transit trade in Eurasia is concentrated on the North-South and East-West axes which, taken together, form two major international transport corridors.

The prospect of developing freight transport along these corridors is associated with both the development of trade and economic relations between the countries participating in the international agreement on the North-South ITC and attracting trade flows to the connections between Europe and the countries of the Persian Gulf and South Asia.

According to Salman Babaev, the project to build a new railway line between Rasht and Astara in Iran and Astara (Azerbaijan) will lend an additional impetus to the development of the North-South International Transport Corridor. This project aims to connect the railway networks of Iran and Azerbaijan in order to create a new competitive railway link between Russia and other European countries on the one hand and the countries of the Persian Gulf and South Asia on the other.

According to expert estimates, a direct rail link with the western branch of the North-South ITC will reduce the delivery times of goods to Iran with access to the port of Bandar Abbas in the Persian Gulf by 5-7 days compared to the trans-Caspian route by eliminating the need for transshipment at ports.

The East-West direction in Eurasia is based on the Trans-Siberian Main Line, which crosses Russia by land and in the east provides access to the railway networks of North Korea, China, Mongolia and Kazakhstan, and in the west to European countries via Russia's ports and border crossings.

The total volume of international rail transport on the Trans-Siberian Railway is increasing, but despite the obvious advantages of freight traffic passing through the territory of Russia by rail, its share is small compared to that of shipping.

"At the moment, we carry less than 1% of total Eurasian transit container traffic on overland transcontinental routes. This is due to the lack of a clear understanding on transport cooperation between different countries and the need to eliminate infrastructural bottlenecks," said Salman Babaev.

Babaev also noted that Russia's leadership attaches great importance to the development of transport infrastructure, including railways in Russia's Far East. The total need for investment in priority measures to develop and modernise the railway infrastructure in Russia's Far East by 2018 is 562 billion roubles, with 302 billion roubles to be be assigned from the Company's investment programme and the rest from Russia's federal budget and National Welfare Fund.

The future development of the East-West international transport corridor is among other things connected with the development and improvement of transporting heavy-duty containers on fast trains. The list of routes is constantly expanding due to the rapidly growing demand for such services and customer requirements. Container trains deliver cargo from Russian ports on the Pacific Ocean to the country's western borders.

However, according to Salman Babaev, at the moment, increasing the amount of transit traffic from China's north-western provinces to Europe is being hampered by a number of factors, in particular inadequate documentary support for transit freight, including containerised freight, the lack of straight-through tariffs and the difficulty of the border and customs procedures.

Salman Babaev said that in this regard it was essential to harmonise the transport policies of the countries involved in the international transport corridors, simplify administrative procedures, introduce straight-through and transparent tariff rates, improve the productivity of the rolling stock and create a network of logistics centres.

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