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Eurasian Development Bank: Rail Market Development Prospects in the Single Economic Space

Eurasian Development Bank (EDB) prepared the report Rail Market Development Prospects in the Single Economic Space. The report reviews the rail freight and passenger transportation market, structural reforms in the sector and the influence of integration processes on its prospects, as well as various types of competition and the freight car market.

The report states that structural reforms in the area of rail transportation in the SES are being implemented at different paces. Kazakhstan is developing in the most dynamic fashion: freight traffic is growing and the market comprises not only rolling stock operators, but independent locomotive operators as well. The Russian operator market is developing more successfully in the area of freight transportation, while passenger transportation is at the starting point of reform. The Belorussian model of rail transport is significantly different: at the moment, the sector is being modernised under a state programme.

The report also reviews competition between passenger and freight operators and between infrastructures, which includes competition between rail routes and road corridors for freight and passenger traffic. Attracting and servicing additional freight transported between the EU countries and East Asia, primarily China, is the key objective in developing the sector in the three SES countries. If to proceed from the priorities of many countries, which are to attract additional freight to their transport systems, competition between rail routes is, in essence, a struggle for freight transit.

The authors of the report state that the rail sector prospects depend, to a significant extent, on the coordination of transport policies in the framework of the Eurasian Economic Union. The establishment of a common market in transport and logistics services and a common transport space, the deepening of integration and the improvement of the quality of the services provided, as well as the coordinated development of international rail routes are among the tasks that need to be solved to ensure the advancement of the sector and the use of its transit potential.

Railway Infrastructure Data

Single Economic Space (SES) 2000 2007 2010 2013
Belarus – railway lines (in operation, km) 5494 5494 5511 5462
– out of which electrified 888 888 898 899
Kazakhstan -railway lines (in operation, km) 13521 14205 15079 14759
– out of which electrified 3724 4144 4144 4170
Russian Federation – railway lines (in operation, km) 86075 85155  85556 85248
– out of which electrified 41115  42911 44015 43306
Total SES – railway lines (in operation, km) 105090 104854 106146 105469
– out of which electrified 45727  47943 49057 48375

In early 2013, the average railway density per 1000 sq km in SES was 5.3km ( in Belarus – 26.3km, in Kazakhstan – 5.4 km and in the Russian Federation – 5 km). For comparison in the USA the railway density per 1000 sq km is 23.34 km, in China is 9.48 km and in several European countries (Belgium, Germany, Czech Republic, Switzerland) more than 100 km.

Rail Freight (bn tkm)

Countries 2007 2008 2009 2010 2011 2012 2013
Belarus 47.9 42.7 49 46.2 49.4 48.4 43.8
Kazakhstan 200.8 214.9 197.5 213.2 223.6 235.9 229.1
Russian Federation 2090  2116 1865 2011 2128 2222 2195.8
Total SES 2338.7 2379.9 2105.2 2270.4  2401 2506.3 2468.7

Over the last six years, railway freight within the EEA has increased by 5.5%. However all three countries experienced a decrease in rail freight transport in 2013, due to economic factors and a decrease in the industrial production of Russia in 2013 – 2014.


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