China Railway wins Russia’s Moscow-Kazan High-speed Rail contract worth US$390 Mil

Shanghai: Construction firm China Railway Group Ltd said it won a 2.4 billion yuan ($390 million) contract to build a high-speed railway line in Russia connecting Moscow with the city of Kazan.

The company, which is aiming to expand its business overseas after years of building China’s railway network at home, said in a regulatory filing late on Tuesday it expects to complete the project before the 2018 FIFA World Cup in Russia.Moscow-Kazan Highspeed RailKazan, in west-central Russia, is one of the venues for the soccer tournament Chinese President Xi Jinping signed billions of dollars worth of deals with Russia last week on a visit to Moscow for the 70th anniversary of the defeat of Nazi Germany in World War Two.

Russian foreign policy adviser Yuri Ushakov said earlier this month that China had offered to provide 300 billion roubles  ($6 billion) of financing for the high-speed rail project.

The Moscow-Kazan segment is part of a planned 1.068 trillion rouble, 770-kilometre network designed to allow trains to run at up to 400 kilometres per hour.

Travel time between Moscow and Kazan, the capital of Tatarstan, will be cut to 3.5 hours from 14 hours currently.

The other projects comprise a railway line connecting the Tuvan Republic, in the same area of Russia, to western China, and a port project in eastern Russia.

CECC said the firms would sign a contract for general contracting once the projects obtained funding.

Last week, Russian Transport Minister Maxim Sokolov said the countries would invest $19.7 billion in a rail link between Moscow and the Russian city of Kazan to be completed by 2020. Putin said the level of Chinese investment would be around $5.9 billion.

Project Profile

The first stage of the creation of high-speed railway services in the Russian Federation will be the construction of the Moscow to Kazan rail track of the HSL-2 link, which will run across the territory of 6 constituent entities of Russian Federation: Moscow and Moscow region, Vladimir and Nizhny Novgorod region, Tatarstan and Udmurtia. Subsequent development of the rail link includes its extension to Yekaterinburg.

The launch of the link will ensure a 4-fold reduction of the travel time between Moscow and Kazan: from the current 14 hours (on the existing railway infrastructure) down to 3.5 hours, whereas the travel time between Nizhny Novgorod and Kazan will be reduced by 7 times: from 10h 32m to 1h 37m. The Moscow-Kazan high-speed link will facilitate improvement of the degree of connection between the territories of Russia and the mobility of population; the average travel time between the capitals of the regions will be 1 hour.

Key Features of the Moscow-Kazan HSL Project:

  • Track length: 770 km
  • Travel time: 3 hours 3 minutes
  • Maximum speed: up to 400 kmph
  • Rail gauge: 1520 mm
  • Implementation scheme: PPP

Effects of constructing the Moscow-Kazan high-speed rail line (HSR):

  • There will be more than 373,000 workers employed on the construction of the HSR, and they will provide a multiplier effect on the economy.
  • Due to cumulative effects, the combined growth of GDP from 2019 to 2030 will be RUB 7.2 trillion.
  • The multiplier effect generated during the operation stage will generate additional tax revenues of RUB 2.3 trillion at all levels of government for the period of 2019-2030, which is more than the total cost of the project.

Project History

The Moscow—St.Petersburg High-Speed Line (HSR 1) project has a long and complicated history. Its inception coincided with the turbulent time of perestroika — the country had to go through it, and then, so did Russian Railways (RR). Beginning in 1987, a number of projects were carried out — projects that were to have culminated in HSR construction. Not one of them, however, ended in success.

The decision concerning the necessity of constructing a high-speed rail line to connect Moscow and St. Petersburg was made back in 1991. On 13 September 1991, RF President B. N. Yeltsin signed Order No.120, which mandated the creation of Russian Joint-Stock Company High-Speed Rail Lines. The Company’s main tasks involved construction of the Moscow—St.Petersburg high-speed rail line and the production of an integrated electric-powered train capable of traveling at speeds up to 350 km/h. The 1998 crisis, however, thwarted this project.

Later, the RF Ministry of Transportation decided to commence the development of high-speed travel by “speeding-up” the existing rail line between Moscow and St. Petersburg. As it turned out, the first attempt at producing high-speed trains in the Russian Federation could be deemed the launch of the high-speed “Sapsan” (Peregrine Falcon) train between Moscow and St. Petersburg, as well as between Moscow and Nizhny Novgorod along existing rail lines. The “Sapsan” project significantly improved transportation connections and represented an important step along the path towards a full-fledged high-speed rail line.

In 2004, RF Transportation Minister Igor Levitin argued in favor of restarting construction of a separate high-speed rail line. The proposal was supported by JSC Russian Railways President Vladimir Yakunin. Finally, in 2006, JSC RR returned to the idea of developing a comprehensive concept for the construction of a high-speed rail line. JSC High-Speed Rail Lines was formed and tasked — first and foremost — with conducting preparatory work for the engineering-design of the Moscow — St. Petersburg high-speed rail line (working title: HSR 1). At present, JSC High-Speed Rail Lines has already completed line layout, prepared an investment feasibility study and researched the best-available global experience, and elaborated comprehensive HSR 1 project Concept, which will be presented on the international infrastructure provider and financial institution market.

The foundation for the creation of HSR in Russia

The demand for the development of rapid and high-speed rail transport in Russia proceeded from the growing passenger traffic, depreciation and obsolescence of the current rail network and the demand of the country for the modern, sustainable, top-quality and safe transportation service for passengers conforming to the XXI century standards.

During the last several years a number of official acts has been issued in Russia. These acts are aimed at the development of the high-speed rail  lines network and the realization of the involved projects. The key acts which create the basis for the HSR development in Russia are:

  • Russia’s Railway Transport Development Strategy 2030.  Approved by the order No. 877-R  of the Government of the Russian Federation of July 17, 2008;
  • The Edict No. 321 of the President of the Russian Federation of March 16, 2010 «Concerning actions of management of the high-speed rail service in Russian Federation»;
  • Federal Special Purpose Programs including the subprogram “The Railroad Transport” of the Federal Special Purpose Program “Russia’s Transport System Development 2010-2015” (the order No. 781-R of the Government of the Russian Federation of June 15, 2007);
  • The action plan of the realization of the high-speed railroad service projects approved by the vice-head of the Government of the Russian Federation of December 31, 2010.

In 2006 JSC High-Speed Rail Lines was founded as a branch enterprise of JSC Russian Railways. It was authorised to the execution of work under the analysis and the realization of the high-speed railways construction projects.

According the the The Edict No. 321 of the President of the Russian Federation of March 16, 2010 «Concerning actions of management of the high-speed rail service in Russian Federation» JSC Russian Railways was authorised to exercise of the functions of a consumer during the engineering of the high-speed rail transport infrastructure. In December 2010 the Russian Federation was announced as a host for 2018 FIFA World Cup. The holding of this event  evolved the necessity of the urgent preparation of the national transport infrastructure for the service of passenger traffic which will essentially increase facing and during the holding of the World Cup.

As a result the state priorities concerning high-speed railways building have been essentially corrected. It was decided to consider projects of high-speed lines construction to unite major cities hosting 2018 World Cup by the rapid, efficient, comfortable and safe transport. It is also actual for the further social and economic development of the Russian Federation.