Russian Rail Postpones Plans for Two-Track Routes in Far East for at Least a Year and Likely Far Longer, Verkhoturov Says

Paul Goble

            Staunton, June 25 – Russian Rail officials announced this week that they are postponing plans to open two-track routes in the Far East for at least a year and more likely two or more, a step that reflects falling profits and a significant cutback in the company’s modernization plans, Dmitry Verkhoturov says.

            As recently as last year, the economic analyst says, Russian Rail had an investment program of 1.5 trillion rubles (15 billion US dollars), of which 400 billion (4 billion US dollars) were to be spent adding dual tracks on the Trans-Siberian and BAM routes. But now the company has cut back both (sibmix.com/?doc=17146).

            Russian Rail will spend only 891 billion rubles (8.9 billion US dollars) for all investment projects and only 100 billion (one billion US dollars) in the Far East. That will make it impossible to build the tunnels on the two chief lines needed to add parallel tracks that would have allowed them to carry far more cargo.

            Much of that is coal being sold to China, and consequently, this delay will mean that Russia will have a harder time earning the money it needs for the things it purchases from Beijing and that relations between Moscow and China will be negatively affected because China very much wants the additional coal double tracking would make possible.

            Consequently, what might appear superficially to be a small problem has the potential to mushroom into a larger one unless the Russian government intervenes with more money for its rail lines in the east or the Chinese regime does, something that would change the balance of economic power there still further away from Moscow.