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Oleg Belozerov, OAO RZD President. Speech at the Opening of the Sochi 1520 Strategic Partnership Fo

In 10 years the Forum turned into a site of taking truly important decisions. It gradually goes beyond the “1520 Area” [common set phrase for countries with 1520-mm track gauge - RRC note] and is becoming global.

One of examples of productive cooperation are joint projects with Indonesia. In mid-May, within the Russia - ASEAN Summit, we met with Indonesia President Joko Widodo and a discussed potential of our cooperation. OAO RZD is taking part in modernization and electrification of existing lines as well as designing new lines in Indonesia. I would also like to mention supply and arranging local production of the rolling stock in Indonesia.

I believe that we need to further expand exports of the rail products and technologies of the “1520 Area”.

Another success is working with Finnish Railways on launching the Allegro trains between St. Petersburg and Helsinki. In December 2015 we celebrated the 5th anniversary of this project with nearly 2 million passengers transported.

The world has substantially changed in the last 2 - 3 years and I believe it is critical to discuss further development of the “1520 Area” railways.

Sanctions affected import, which decreased nearly 30%. Russian railways’ transit dropped 37%. As for the imports from Europe into Russia, it dropped 41% in the last three years.

Targeting Russian exports to the Asia Pacific countries is absolutely logical in the current economic framework. Russian exports to Asia Pacific hauled by rail transport reached 111 M tons in 2015.

Experts believe that by 2025 the total freight to Asia Pacific, including transit, is to triple. For this reason the “1520 Area” infrastructure is getting more and more important.

Over 3/4 of the rail freight exported from Russia go via marine ports of Russia, CIS and Baltic States. Although tariff benefits and discounts are offered, although it takes less time to haul freight by rail, consignors are not keen on diverting from the routes they are used to. Low ratings of the “1520 Area” rail logistics add on to that.

The takeaway we need to make is that we need to jointly offer customers convenient transportation chains, new transportation products, attractive pricing offers reducing the transportation component and increasing the service quality and completeness.

We do have the basis for this. The GEFCO logistics company with a diverse network of foreign rep offices is operating for several years at the “1520 Area”. Other OAO RZD subsidiaries are there, too - Transcontainer, RZD Logistics; these companies improve their competences and professionalism.

In cooperation with Belarus and Kazakhstan partners OAO RZD is working on the first business project within the Eurasian Economic Union [Economic union of Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan, the successor of the Customs Union - RRC note] with United Transport and Logistics Company being the transit container freight operator for “China / South-East Asia - Europe” routes.

We need to shape a consolidated rail infrastructure for international transportation. The freight transportation at the China - Europe - China route tripled to 2014. And there is potential for further increase.

Increasing of the Transsiberian Mainline and BAM, development of the “Primorye-1” and “Primorye-2” international transportation corridors have to improve attractiveness of the “East - West” international freight transportation.

Extending the 1520-mm gauge railway from Kosice to Bratislava and Vienna is ongoing.

Recently, as sanctions were lifted from Iran, transportation at the “North - South” transportation corridor is on the rise. In four months the transportation between Russia and Iran rose 25%, even over 25%. I am sure there is huge potential - it is about not hundreds of thousand but millions of tons of freight. We believe the “North-South” international transportation corridor is very important.

Russia, Iran and Azerbaijan have already confirmed their interest in developing this corridor. We discussed further cooperation with Iranian Railways President, Dr. Mohsen Pour Seyed Aghaie, who is here. We have also agreed with our Azerbaijan colleagues Dzhavid Gurbanov to sign multilateral documents. An additional impetus to developing freight transportation in the “North-South” transportation corridor is completion of the railway construction that linked Uzen (Kazakhstan) and Gorgan (Iran). The Resht (Iran) - Astara (Azerbaijan) line will provide additional support to the freight transit. Therefore, we are systematically working at establishing a reliable Eurasian transportation corridor using the “1520 Area” as much as possible.

Within the forum we need to pay special attention to passenger transportation initiatives. They are becoming more internationalized and accessible for customers.

Russian, Uzbekistan and Lithuanian railways have commissioned new speed trains. Azerbaijan acquired Stadler double-deckers. Latvian and Belorussian Railways laughed renewed interfaces allowing online ticket acquisitions.

Despite our efforts, international transportation is radically going down - it dropped 34% in 2015. For this reason railways need to concentrate on increasing operational speed, multimodality, development of additional services. Affordable prices are among priorities here, too.

And the last point I would like speak on. The “1520 Area” countries need to be more proactive in linking the Eurasian Economic Union and the Silk Road Economic Belt. Establishment of the Moscow - Beijing Eurasian High-Speed Transportation Corridor is one of the key initiatives to do it.

On June 3 we will have the “New Silk Road Cities” Forum - it is to be held within our Business Forum and attended by mayors and governors of Russian and foreign cities and regions. We will be talking on construction of the Eurasian railway corridor. It is a global anti-crisis step allowing to overcome economic issues and political disagreements, decrease the distance between Eurasian regions and shape the space for equal opportunities. In fact, people will have an opportunity to live and work in different cities and move between them as we move between metro stations.

We will continue the discussion on June 14 at the Eurasian international transport corridors in Shanghai within the “International Business at Transit Speeds” Conference. Let me invite all of you to take part in this event. And let me also wish you productive work, contracts, new experiences and knowledge today and tomorrow.

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