Vedomosti Held Transportation and Logistics Forum

The Vedomosti newspaper conducted the Eurasian Transportation and Logistics Forum on April 11. Government transportation sector officials and the directors of major transportation companies and investment funds participated, including Deputy Transportation Ministers Andrei Nedosekov and Valery Okulov, Russian Railways vice president Salman Babayev, Aeroflot deputy general director Shamil Kurmashov, Globaltrans board of directors chairman Alexander Yeliseyev, Summa Capital president Marat Shaidayev and others.

Deputy Transportation Minister Nedosekov said that in 2010 the transportation industry recovered quickly from the crisis and underscored that several segments even surpassed pre-crisis levels. He said Russia invested 2.2 percent of its gross domestic product in transportation last year, but that China invested 6 percent of its GDP during the same period. Nedosekov said that Russia should invest more in developing its transportation infrastructure.

Global Ports board of directors chairman Nikita Mishin said that despite the long recoupment period, he is certain that high profit margins make transportation infrastructure investments attractive.

Russia Railways' Babayev said rail reforms had proven their value: The industry attracted more than 400 billion rubles (more than $33 billion) in private investments, thereby managing to solve the problems associated with its outdated rolling stock. He said further reforms are needed and that the state, Russian Railways and private players would have to solve a range of problems — from an increase in empty mileage to substantial limitations in the capacity of existing railways. Yeliseyev of Globaltrans added that reinstating price regulations would lead to wagons not receiving necessary upgrades and would push the industry back to its pre-reform condition.

Aeroflot's Kurmashov said the removal of restrictions on foreign investments in Russian airlines is the result of Russia’s impending accession to the World Trade Organization, and that it also opens access to the market and brings with it a number of benefits. The authorities plan to eliminate tariffs on the purchase of foreign airplanes and permit Russian airlines to hire foreign pilots.

Among the many problems the transportation sector faces, the most difficult are the depreciation of funds and chronic underfunding. However, forum participants were certain that bringing in foreign capital would solve these problems and that the industry has major growth potential.