You're reading: Russian Railways planning capex of 396.8 billion rubles in 2015 with Ukraine bypass

Moscow -- The railway on the border of Voronezh and Rostov regions that Russia plans to build to bypass Ukraine will run 5 to 20 kilometers from the border between the two countries. 

“In order to ensure the proper level of transport safety there are plans to build a 136.8 km ‘long bypass’ with convergence points at the Zhuravka and Millerovo stations,” a memo attached to the financial plan of Russian Railways (RZD) for the next three years, a copy of which has been reviewed by Interfax, states. The company said this version of the bypass is “optimal.”

The border runs in a zigzag between Rossosh in Voronezh Region and Chertkovo in Rostov Region and because of this the main Moscow-Rostov freight and passenger line of the North-South transport corridor crosses it in four places. The line runs through Ukrainian territory for nearly 21 km. This is a heavy traffic section carrying 33 pairs of freight trains, 55 pairs of passenger trains and six pairs of suburban trains per day, while the parallel rail line located further east is already running at more than 80% of capacity, the document states.

“In the event that Ukraine, without alternative, raises the issue of state control over freight and passengers travelling along its two transit sections from Russia and back, there will be a need to build railway checkpoints at train receiving-transfer points,” RZD said, noting that the Gartmashevka and Zorinovka stations do not have infrastructure for customs and border operations. In addition, railway checkpoints must have phytosanitary, veterinary and quarantine control facilities.

RZD estimates train delays for border operations at each point would be four hours for freight trains and one hour for passenger trains just on the Russian side. This would reduce the throughput capacity of the route, and lead to financial losses for railroad operators and the state. It would also be necessary to build buffer stations. In order to avoid these negative consequences, RZD has proposed building the bypass line.

RZD’s draft investment budget proposes to spend 56.6 billion rubles on the line in 2015-2017 (including 7 billion rubles in 2015, 18.5 billion rubles in 2016 and 31.1 billion rubles in 2017) “on the condition that state support funds are allocated” through the purchase of additional shares in the company. These funds were factored in when the federal budget for the next three years was being drafted. On Friday it was passed by the State Duma in the third reading and sent to the Federation Council.

If the version of the investment program with the Ukraine bypass is approved, RZD’s capital expenditures will total 396.8 billion rubles in 2015, 497.35 billion rubles in 2016 and 504.9 billion rubles in 2017 instead of the respectively 389.8 billion rubles, 478.8 billion rubles and 473.7 billion rubles previously approved by the company’s board of directors.

The project was proposed by RZD. “We once talked about a Prokhorovka-Zhuravka-Chertkovo-Bataysk project. And we [with the Transport Ministry] looked at it as an acceleration and re-route to the south. But, we will probably have to create one section of the project more quickly – Zhuravka-Chertkovo. Spending will be from 45 billion to 60 billion rubles, but this is very important work, in order to have a stable, reliable and independent route to the south,” RZD First Vice President Vadim Morozov said in March 2014 at a Federal Rail Transport Agency meeting, adding that this agency was already putting together an application for 2015-2017.

There is no danger to passengers travelling on the section of railway between central and southern Russia that briefly passes through Ukraine’s Luhansk region, RZD president Vladimir Yakunin said last week.

Earlier, Russia already asked Ukraine to transfer border territory in Luhansk region, along which the Rossoch-Millerovo railway line, which serves as a route between southern Russia and the central part of the country, transits. The Russian-Ukrainian border lies in the immediate vicinity of this railway line outlet (and the almost 30-km Gardmashevka-Mikhailovo-Alexandrovka section repeatedly enters Ukrainian territory). The Ukrainian-Russian Demarcation Commission was asked to consider reallocating border territories so that these sections would be in Russian territory.

RZD said in 2012 that it would “welcome a mutually advantageous solution to the property problem in accordance with international law from the authorized bodies in Russia and Ukraine.” At the time, a bilateral interdepartmental group worked on an intergovernmental agreement on the conditions for transferring rights to rail infrastructure facilities, which would be considered the property of Ukraine.