DMITRY MACHERET First deputy Chairman of the Russian Railways Joint Scientific Council,

1. The Trans-Siberian in 7 days (an innovative and competitive transport product) DMITRY MACHERET First deputy Chairman of the Russian Railways Joint Scientific Council, Doctor of Economic Sciences, Professor 17 October 2012 “Russia – EU” seminar VNIIZhT (Russian Rail Transport Research Institute)

2. The Trans-Siberian Railway – a link between Europe and Asia The Trans-Siberian Railway is a high-capacity route, electrified throughout its length and equipped with modern types of automation, communications and information technologies. The Trans-Siberian has significant spare traffic and transport capacity and can handle significant levels of additional freight. The target period for delivering containers from the eastern to western borders of Russia by the Trans-Siberian Railway is 7 days Development of railway infrastructure Cooperation with foreign railways and organisations Development of intermodal transport technologies Development of the logistics sector Application of modern information technologies ОАО «Научно-исследовательский институт железнодорожного транспорта» 2 Russian Rail Transport Research Institute

3. Strategic parameters of the “Trans-Siberian in 7 days” product 9,806 km Nakhodka – Krasnoye 7 days 1,400 km/day Speed of delivery and stability of transit time √ Possibility of running up to 15 pairs of trains per day Regularity of service √ Adherence to fixed traffic schedule By time spent en route By arrival at final destination √ A competitive tariff based on the “price – delivery time” criterion Target tariff Deep-sea + $1,000 √ For 2 or 3 years as a minimum Stability of tariff policy √ Timely provision of information about changes to tariffs 60 days before they are brought into effect √ Russian Rail Transport Research Institute

4. Strategic priorities of the “Trans-Siberian in 7 days” product • Approval of rules for transport in container trains • Improving the international regulatory framework • A competitive tariff • Stability of tariff policy • Tariff application periods stabilised for up to 2 or 3 years • Tariffs established for container transport per wagon, and in future per container train Improving the legal and regulatory framework • Increasing speeds up to 1,400 km/day • Replacing rolling stock • Introducing modern information systems Tariff regulation Strategic priorities of the “Trans-Siberian in 7 days” product Changes in technology Developing the infrastructure Increasing the quality of transport services • Removing infrastructure-related speed restrictions • Modernisation and construction of new container terminals • Simple document processing • Adherence to schedule • Regular service Russian Rail Transport Research Institute

5. Main measures to develop the infrastructure of the Trans-Siberian Railway Expanding the network of container terminals for processing high-tonnage containers Refurbishing stations and lengthening arrival and departure tracks to 71 u.v. Modernising and strengthening power supply, computerisation and communications facilities and equipping the line with double track automatic block signalling Construction of second stage of rail bridge crossing over the Amur River in Khabarovsk Construction of Perm and Chita rail hub bypasses Development of Zabaikalsk and Naushki border stations Completion of construction of second tracks on the Karymskaya – Zabaikalsk section, with the possibility of electrification Development of pre-port stations in the Nakhodka railway hub, servicing the ports of Vostochny and Nakhodka Russian Rail Transport Research Institute

6. Increase in route speeds of container trains on the Trans-Siberian Railway, km/day 1500 Future level 1400 Target level (achieved during trial journeys)  1100 900 Level achieved to date Base level 6 Russian Rail Transport Research Institute

7. The mega-economic effect of switching 1 TEU from deep sea to the Trans-Siberian route Russian Rail Transport Research Institute

8. The effects of expanding the involvement of rail transport in Eurasian transcontinental transport Increase in GDP for countries producing goods • Potential additional GWP(mega-economic effect) of • $2.9 billion Reduction in losses for manufacturers from “freezing” of value of transported products Increase in GDP for countries consuming goods Benefits for consumers from increase in speed of delivery and reduction in prices Switching 1 million TEU fromdeepseato trans-continental routes using rail transport Additional revenue for logistics and operator companies Increase in GDP for countries involved in transporting goods Additional revenue for railways Russian Rail Transport Research Institute

9. The importance of the innovative and competitive “Trans-Siberian in 7 days” transport product for the global railway system and the global economy Implementing the idea of the mutual usefulness of the 1520 Area and the 1435 Area The Trans-Siberian in 7 days Increasing the global competitiveness of rail transport The “renaissance” of the railway industry Mega-economic effects in the interests of consumers and producers from European Union and APEC countries and Russia Russian Rail Transport Research Institute

10. Thank you for your interest! Russian Rail Transport Research Institute