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Belarus Belarus Railway and Logistics Strategy Report No: AUS0000573 . Public Disclosure Authorized Belarus Belarus Railway and Logistics Strategy Organizational, Policy and Planning Actions Activity 2 - . July 2018 Public Disclosure Authorized . TDD . Public Disclosure Authorized Public Disclosure Authorized . 1 © 2017 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “World Bank. {YEAR OF PUBLICATION}. {TITLE}. © World Bank.” All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. 2 Tables of Contents ACKNOWLEDGMENT ...................................................................................................... 5 1 Introduction ...................................................................................................................... 9 1.1 Background ........................................................................................................................................ 9 1.2 Summary of Findings on the Belarus Economy ........................................................................... 9 1.3 Summary of Findings on Belarus Transport ............................................................................... 10 1.4 Organizational Structure of the Belarusian Rail Sector ............................................................. 12 1.5 Summary of Activity 1 Findings and Recommendations .......................................................... 13 1.6 Objective and Contents of Activity 2 Report ............................................................................. 13 2 Railway Administration .................................................................................................. 14 2.1 Current Administrative Structures ................................................................................................ 14 2.2 Bringing More Commercial Focus to Railway Activities .......................................................... 15 2.3 Transition Approaches .................................................................................................................. 17 3 Railway Passenger Transport ......................................................................................... 19 3.1 Status of Rail Passenger Services ................................................................................................. 19 3.2 Rail Passenger Services Management .......................................................................................... 20 3.3 Transformation Approach ............................................................................................................ 22 4 Railway Freight Transport ............................................................................................. 23 4.1 Status of BCh Railway Freight Services ...................................................................................... 23 4.2 Managing Railway Freight Services ............................................................................................. 25 4.3 Marketing Freight & Logistics Services ...................................................................................... 26 4.4 Transformation Approach ............................................................................................................ 28 5 Freight Tariff De-Regulation ......................................................................................... 29 5.1 Rail Freight Market Conditions .................................................................................................... 29 5.2 Railway Tariff Regulation in Belarus ........................................................................................... 30 5.3 Commodity Exemption Principles .............................................................................................. 30 5.5 Deregulating The Tariff Wagon Component ............................................................................ 32 5.6 Methodology to Establish Commodity Exemptions ................................................................ 36 5.8 Introduction of Tariff Flexibility ................................................................................................. 36 6 Rail Transport in Competitive Markets ......................................................................... 39 6.1 Rail Passenger Revenue Enhancement Efforts ......................................................................... 39 3 6.1.1 PSO Agreements .......................................................................................................................... 40 6.1.2 Peak Period Pricing ...................................................................................................................... 40 6.1.2 Premium Services and Amenities .............................................................................................. 40 6.1.3 Identity Branding.......................................................................................................................... 41 6.1.4 Land Development ...................................................................................................................... 42 6.1.5 Passenger Market and Revenue Enhancement ........................................................................ 42 6.2 Rail Freight Marketing Efforts ..................................................................................................... 42 6.2.1 Increase the Use of Private Wagons .......................................................................................... 43 6.2.2 Private Contracts .......................................................................................................................... 44 6.2.3 Wagon Pool Operators ............................................................................................................... 44 6.2.4 Bulk Distribution Terminals ....................................................................................................... 45 6.2.5 Auto Transport Terminals .......................................................................................................... 46 6.2.6 Warehousing and Distribution Facilities .................................................................................. 47 6.2.7 Intermodal Terminals and Services ........................................................................................... 48 6.2.8 Freight Markets Summary ............................................................................................................ 48 7 Summary, The Way Forward .......................................................................................... 49 7.1 New Railway Organization & Strategy ........................................................................................ 49 7.2 Legal & Regulatory Framework ................................................................................................... 50 7.3 Develop Business Plans and Commercial Strategies ................................................................ 50 7.4 Establish and Implement a Digital Development Plan ............................................................ 50 7.5 Implementation Steps .................................................................................................................... 51 4 ACKNOWLEDGMENT This study is funded by a generous grant from the Korean Green Growth Trust Fund (KGGTF). It is expected to contribute towards the improvement of competitiveness of the railway sector and logistics services in Belarus. The report was prepared by a World Bank team led by Winnie Wang, Senior Transport Specialist, Task Team Leader, and Victor Aragones, Senior Transport Economist. The team consisted of John Winner, Lead Railway Policy Consultant and Andrei Evdokimov, Senior Railway Tariff Consultant. Hanna Shvanok, Program Assistant, provided support to the team throughout the study. The report benefited from the comments of Peer Reviewers: Luis Blancas (Senior Transport and Logistics Specialist), Karlis Smits (Senior Country Economist), and Federico Antoniazzi (Railway Economist). The team is grateful for the guidance provided by Alexander Kremer (Country Manager), Karla Gonzalez Carvajal (Practice Manager of Europe), Juan Gaviria (former Practice Manager of Europe), Young Chul Kim (Adviser), Elena Klochan (former Senior Country Program Coordinator), Irina Oleinik (Operations Officer) and Baher El-Hifnawi (Program Leader). The World Bank team would like to formally thank its
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