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September 9, 2012

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Russia plans to modernize infrastructure

RUSSIA'S failure to keep up with its neighbors in building the roads, railways and other infrastructure needed to support growth is costing it dearly, and hindering the regional economy's full potential, business leaders gathered for an Asia-Pacific summit said.

Russian President Vladimir Putin has promised to make the modernization of the country's infrastructure a priority for the coming years even though the challenges are great.

While China, Japan and South Korea have raced to build high-speed railways, ultra-modern ports and showcase airports, Russia's investment in its resource-rich far eastern regions has lagged behind.

Five years ago, it took four to five days to send rail wagons from a Siberian mill to the Chinese border and back. Now it takes seven to 10 days, said Paul Herbert, CEO of Ilim Group, Russia's largest paper and pulp company and the largest soft-wood supplier to China.

Ilim, which is 50 percent owned by International Paper, ships more than 1 million tons of pulp and board for packaging to China each year, 90 percent of it by rail, and 10 percent by rail to Vladivostok and then by ship.

An Ilim rail car crosses into China every 20 minutes on average, through three spurs of the Trans-Siberian Railway.

Overall traffic has increased but the switching equipment and rolling stock have not.

The railroad's capacity has been "constipated by under investment in switching facilities," said Herbert, who has worked in the industry for more than 40 years.

Putin said Russia has been increasing the capacity of its railroads, noting the Trans-Siberian now ships more cargo than at Soviet-era heights, but he acknowledged that much more needs to be done to improve the country's infrastructure.






 

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