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Investment Activities ANNUAL REPORT − 2020 RUSSIAN RAILWAYS Investment activities The expansion and upgrade The priority of the Russian Railways No. 204 dated 7 May 2018 that aim to investment programme in 2020 is make substantial positive changes to of railway transport fixed to achieve the targets set in the the rail infrastructure across the country. assets is indispensable for Comprehensive Plan for Upgrading Russian Railways investment activities and Expanding Core Infrastructure until provide RUB 6 tn worth of economic the balanced economic 2024 and Russian President’s Decree benefits to Russia. development of a nation, establishment of the domestic production base, Investment programme approaches unlocking of the industrial potential, and promotion The Company’s investment programme is for the Russian Federation. The above of the country’s territorial designed to: assessments are performed in line with • ensure uninterrupted transportation the Methodology for Evaluating the integrity and security. The service; Social and Economic Impacts.1 In addition, implementation of the • embrace the most promising projects in the Company uses the Procedure terms of both commercial and budget for Calculating the Russian Railways investment programme is efficiency; Group’s Contribution to the GDP of the a key enabler to deliver • minimise federal government spending Russian Federation.2 The procedure on investment projects. requires, among other things, to take on the strategic goals and into account social and economic factors objectives of the Russian To evaluate project feasibility, Russian when conducting the assessments. The Railways applies a comprehensive balanced criteria for an investment project Railways Group. approach involving assessments to be considered feasible are a payback of investment efficiency for project period of up to 20 years and an IRR of at participants and measurements of budget least 10%. and social and economic efficiency 1 Full title: Methodology for Evaluating the Socio-Economic Impacts of Transport Infrastructure Construction (Upgrade) and Operation Projects Intended to Be Funded from the Federal Budget, Backed by the Government Guarantees of the Russian Federation and Eligible for Tax Relief. Approved by Resolution of the Russian Government No. 1512 dated 26 November 2019. 2 Approved by Russian Railways Order No. 1957r dated 6 September 2019. PERFORMANCE OVERVIEW 70 | 71 Investment highlights in 2020 As approved by the Russian Railways Investment projects included in the Comprehensive Plan Board of Directors, the 2020 investment programme1 totalled RUB 704.1 bn, Enhancement of the throughput and carrying capacities to deliver inlcuding: a four-fold increase in transit container traffic, including the Trans- • RUB 583.1 bn of the Company’s own Siberian in Seven Days project funds; • RUB 121.0 bn of the government support. North-West ports and border crossings The spending on the Russian Railways 2020 investment programme stood at Krasnoye RUB 717.3 bn (101.9% of the approved plan). In 2020, Russian Railways continued its work towards achieving the goals Ozinki Iletsk Petropavlovsk established in the Transport Section of Kartaly the Comprehensive Plan for Upgrading Samur and Expanding Core Infrastructure until 2024 (the “Comprehensive Plan”) and Primorye Naushki Zabaikalsk Russian President’s Decree No. 204 dated Territory ports and border crossings 7 May 2018. The project progress in 2020: • in 2020, the transit container traffic • in 2020, transit container shipping totalled 830.9 thousand 20-foot times on the Europe to Western China equivalent units (TEU) vs the targeted route were reduced to 2.0 days vs the 680 thousand TEU (increase by 2.2 days’ target (1.2 days faster than in 212.7 thousand TEU vs 2019). 2019); • in 2020, transit container shipping In 2020, the Company completed times on the West to East route RUB 2.8 bn worth of works to develop improved to 7.8 days vs the 8.0 days’ design documents and estimates (143% vs target (1.1 days faster than in 2019); 2020 plan). 1 Meeting on 29 December 2020 (Minutes No. 5). ANNUAL REPORT − 2020 RUSSIAN RAILWAYS Construction of a western bypass Upgrade of rail infrastructure of the Baikal–Amur and Trans- at the Saratov Transport Hub with Siberian main lines to increase throughput and carrying the expansion of the Lipovsky– capacities (phase 1) Kurdyum section to Syzran Lipovsky Krasnoyarsk Tayshet Severobaikalsk Trofimovsky II Severomuysk to Atkarsk Sayanskaya Tynda Tatishchevo Kurdyum Gorely Saratov I-Passenger Novokuznetsk- 30 km block st. Vostochny Komsomolsk- Saratov II-Freight Irkutsk- Saratov III Sortirovochny Chita I Sortirovochny Zabaikalsk Vanino Knyazevka Volga Bagaevka st. Ivanovsky Sibirtsevo Neftyanaya St. Vladivostok Nakhodka- Vostochnaya Anisovka The project is aimed at developing and In 2020, the total carrying capacity of The project is aimed at developing the upgrading the rail infrastructure to create an the main lines stood at 144.0 mt vs the rail infrastructure on the far approaches additional 55 to 66.8 mt carrying capacity 144.0 mt target. to the ports of the Azov and Black Seas, on routes to sea ports and Far East border enabling an increase in freight carriage crossings in 2021 vs 2012. through the Saratov Transport Hub of at Upgrade of the Baikal-Amur and the least 49.2 mt vs 2015. In 2020, the Company completed Trans-Siberian main lines (phase 2) RUB 56.7 bn worth of works (87% vs 2020 In 2020, the total carrying capacity on the plan). The project is aimed at increasing the approaches to the Saratov Transport Hub carrying capacity of the Baikal-Amur and of the Privolzhskaya Railway was 75.6 mt. In 2020, Russian Railways shipped the Trans-Siberian main lines to 180 mt by 125.8 mt of coal and ore from the main 2024. In 2020, the Company completed mineral deposits, which is above the RUB 0.4 bn worth of works to develop upper end of the target set in the project In 2020, the Company completed design specifications and estimates (79% data sheet (124.9 mt). RUB 10.3 bn worth of works to develop vs 2020 plan). design specifications and estimates (127% vs 2020 plan). Development and renovation of the rail infrastructure serving ports of the Azov and Black Seas The project is aimed at creating the 125.1 mt carrying capacity of railway sections serving ports of the Azov and Maxim Trubnaya Black Seas by 2024 (+50.1 mt vs 2015). Gorky Volgograd Verkhniy Baskunchak In 2020, the Company completed Taganrog Volgodonsk Kotelnikovo RUB 15.2 bn worth of works (101% vs 2020 Rostov-on-Don Kuberle plan). Azov Sea Salsk Aksarayskaya Astrakhan Grechanaya Tikhoretskaya Kozyrki Poltavskaya Krymskaya Black Caspian Sea Sea PERFORMANCE OVERVIEW 72 | 73 Development and renovation of the rail infrastructure Development of the Central serving ports of the North-Western basin Transport Hub The project is aimed at increasing the Murmansk carrying capacity of the rail infrastructure in the North-Western operating domain to 145.6 mt in 2020 and to 177 mt in 2030. Kryukovo Lobnya Arkhangelsk In 2020, the Company completed Nakhabino RUB 11.4 bn worth of works Zheleznodorozhnoye (118% vs 2020 plan). Odintsovo Ramenskoye St Petersburg Aprelevka Vologda Podolsk Pskov Tver Moscow The project is aimed at strengthening the Electrification of the Ozherelye–Uzlovaya–Yelets section rail infrastructure to achieve the planned (adjustments required for passenger transportation) passenger transportation volumes at the Central Transport Hub. The project is aimed at diverting Moscow passenger trains from the Kazan and In 2020, the Company completed Paveletskoye routes of the Moskovskaya RUB 99.3 bn worth of works Ozherelye Railway, and increasing the throughput (101% vs 2020 plan). Ryazan capacity of the Uzlovaya–Yelets section to 65 train pairs by 2030. Tula In 2020, the Company completed RUB 0.4 bn worth of works (100% vs 2020 plan). Tambov Lipetsk Yelets Creation of the St Petersburg–Moscow Ultra High-Speed Railway The project is aimed at laying the foundation for the development of high- speed and ultra high-speed railway services between major cities. In 2020, the Company completed NOVGOROD TVER Saint Petersburg REGION REGION RUB 2.1 bn worth of works Main St. HSR Moscow (100% vs 2020 plan). Okulovo HSR Oktyabrskaya Obukhovo-2 Tver Vysokovo Vypolzovo HSR HSR HSR Zharovskaya HSR Sadva HSR Gorki HSR Novaya Tver Kryukovo HSR Logovezh HSR HSR Veliky Novgorod HSR LENINGRAD Veliky Novgorod MOSCOW REGION REGION ANNUAL REPORT − 2020 RUSSIAN RAILWAYS Other comprehensive rail infrastructure development projects Development of the railway Reconstruction of the Development of the hub of the St Petersburg Morozovskaya–Volgodonskaya Perm Railway Hub and the transport system railway section construction of a river crossing Orekhovo Sokhranovka VOLGOGRAD Chertkovo REGION Palniki Golovanovo Millerovo Levshino Toksovo Sertolovo Kabelnaya Beloostrov Morozovskaya Likhaya Balmoshnaya Kurya Blochnaya Melnichny Finland St. Ruchey Bronka Moskovsky St. Perm Sortirovochnaya Vitebsky St. Kuberle Perm I Perm Oranienbaum Baltiysky St. Perm II Pavlovo-na-Neve St Petersburg Rostov Main St. ROSTOV Krasnoye Selo REGION Pavlovsk Azov Bataysk Vladimirskaya Gatchina-Varshavskaya Tosno Salsk The project is aimed at developing the In 2020, as part of the Comprehensive The investment project is aimed at St Petersburg Railway Hub in light of Plan for Upgrading and Enhancing Core accommodating the freight volumes from the projected increase in freight and Infrastructure until 2024, the Company the Bereznikovsko-Solikamsky industrial passenger transportation volumes by implemented the Reconstruction of hub by construction of a northern railway 2030. the Morozovskaya–Volgodonskaya bypass of Perm with a railway river Railway Section project to introduce an crossing over the Kama Reservoir. In 2020, the Company completed automatic block signalling system at the RUB 0.9 bn worth of works Morozovskaya–Tsimlyanskaya section of In 2020, spending on the investment (97% vs 2020 plan). the North Caucasus Railway. project stood at RUB 0.6 bn (98% vs 2020 plan). In 2020, the project moved from the investment phase to the operation phase.
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