Logistics of the Future: Infrastructure as a Starting Point for Eurasian Integration

12 September 2023

Logistics of the Future: Infrastructure as a Starting Point for Eurasian Integration

KEY CONCLUSIONS

The turnaround of Russian foreign trade should be supported by the development of transport infrastructure

“From the very beginning of the Eurasian Union, the development of transport infrastructure has been among the priorities of our five countries. <...> In particular, according to EEC estimates, an increase in infrastructure investment by 1% of GDP gives an additional 2% to 5% increase in output,” Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs.

“We can already say that the turnaround of our foreign trade to the East has taken place. This year, in seven months, cargo turnover in trade with Asian countries totalled 420 million tonnes worth USD 275 billion. That is an increase of 45% in cargo turnover compared to last year and 22% in trade turnover,” Ruslan Davydov, Acting Head, Federal Customs Service of the Russian Federation.

“We must realize that the economy is there, in the East, that we are one team, that we must work together, develop at a faster pace, and not compete with each other. Our competitors are abroad,” Sergey Tsivilev, Governor of Kemerovo Region – Kuzbass.

Russia has accumulated sufficient experience and capacity to implement infrastructure projects

“We are building and repairing roads ahead of schedule. In terms of organization, we have gained strength, all the capacities, and we are ready to make a breakthrough. We are ready to grow by 20–30%, only political decisions and finances are needed,” Marat Khusnullin, Deputy Prime Minister of the Russian Federation.

“We have significantly increased our capacity over the last two years, basically from year to year we are doubling the amount of work we have done,” Aleksey Krapivin, Chief Executive Officer, 1520 Group of Companies.

“I believe that we have the basis to attract all the necessary funds, including from Asian and Middle Eastern partners. We have examples of successful projects where this has been done. This experience should be replicated even more actively,” Kirill Dmitriev, Chief Executive Officer, Russian Direct Investment Fund (RDIF).

Existing freight traffic volumes show prospects for increase

“As of today, we have formed a draft programme. We see a horizon already up to 2030 with an increase in freight volumes to 210 million tonnes on the Komsomolsk-Volochaevka sections and up to 255 million tonnes by 2032, taking into account that there are artificial barrier structures there, the construction period of which is about seven to eight years,” Andrey Makarov, Deputy General Director, Russian Railways.

“We have been building railways for more than ten years. I have not yet seen a single facility that has failed to meet its freight traffic targets. There is a lot of discussion about whether there will be volume. I am sure there will be enough,” Aleksey Krapivin, Chief Executive Officer, 1520 Group of Companies.

“We believe that this cargo flow should be assessed by the capacity of ports that have already been put to work. <...> Huge figures for the economy, of course, huge figures for the economy's potential for exports and imports,” Irina Olkhovskaya, General Director, Universal Logistics.

PROBLEMS

Implementation of large infrastructure projects requires serious financing

“We have weakened opportunities to use the resources of international major banks, in particular, the New BRICS Development Bank, the Asian Infrastructure Investment Bank, which have refused to implement new projects in our country because of the possibility of secondary sanctions,” Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs.

“We have to solve the issue of financing. We can talk as much as we want about infrastructure. Of course, we invest some funds directly from the budget, and we are very grateful to our President for this, we have really increased the volume of investment. But to change the situation radically, of course, we need other sources and a different volume of funds,” Marat Khusnullin, Deputy Prime Minister of the Russian Federation.

“We need to invest both budgetary funds and look for extra-budgetary funds. It is very important for extra-budgetary funds to be creative in terms of creating a revenue model. Of course, we need to involve pension funds, involve sovereign wealth funds, and do such comprehensive work,” Kirill Dmitriev, Chief Executive Officer, Russian Direct Investment Fund (RDIF).

“Probably, the state should not spare money to ensure further growth of cargo turnover. As customs officers, we see that the reserves are surely huge,” Ruslan Davydov, Acting Head, Federal Customs Service of the Russian Federation.

SOLUTIONS

Building infrastructure at faster pace

“International transport corridors, in our opinion, should act as factors of the integrated spatial development of the Eurasian Economic Union and the strengthening economic cooperation. <...> We believe that business is able to set quite ambitious goals, even more ambitious than national governments could set,” Alexander Shokhin, President, Russian Union of Industrialists and Entrepreneurs.

“Infrastructure should be built at a faster pace. That's it, the decision has been made. The state must take on these risks whether there will be cargo or not. The state must provide all the necessary funds, give conditions for work <...> and control the deadlines strictly,” Sergey Tsivilev, Governor of Kemerovo Region – Kuzbass.

Development of motorways with an integrated approach to the expansion of the road network

“I believe that in today's situation, the biggest priority for us is motorways. Because they are in fact there, but the question is how quickly we will put them in order. <...> It is clear that we will not carry raw materials on motorways. We can only transport raw materials (coal and ore) by railway. Of course, we need to develop railways. But now the quick solution is motorways,” Marat Khusnullin, Deputy Prime Minister of the Russian Federation.

“Road transport is a very quick breakthrough. But there are quick wins in railways too,” Irina Olkhovskaya, General Director, Universal Logistics.

“A comprehensive infrastructure modernization plan and integration processes are very important. We need to develop all modes of transport. To see where we really have quick wins, where the least investments are needed,” Sergey Shishkarev, Chairman of the Board of Directors, Delo Group of Companies; Chairman of the Supreme Council, Handball Federation of Russia.

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en

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