Criminal
09-14-2003, 03:37 AM
In a previous article posted here, I mentioned the proposal to build a tunnel under the Bering Straits to allow railroad and automobile travel. Here is more information showing the cost benifit. For the most part, it appears that it would be the Russians who stand to benifit the most from such a project. The cost benifits will not be realized until 2015, when the proposed project would be completed.
http://www.geogracom.ru/investment_e.html
Transcontinental railway and tunnel under Bering Straits
One should distinguish between the short-term and long-term aspects of this project. The short-term aspects encompass the period approximately from 2002 to 2015, when there will probably be construction and the first results of operating the tunnel. The long-term aspects are beyond the limits of 2015, when entercontinental co-operation and involvement in the sphere of exchange with China and south-east Asian countries begin to be fulfilled.
According to various estimates the value of the project varies from $30 billion to $45 billion. Sources of return on investment from the Russian side could
be as follows:
Accelerated involvement in the operation of prospective ore and non-ore useful minerals and their attractiveness for foreign investors as a consequence of the rational cost of extraction owing to relatively low transport costs.
Dramatic broadening of the logging zone useful for exploitation with the primary working of timber.
Essential reduction of budget costs of the state in seasonal transport of loads to the north and liberation (re-profiling) of about 40 large supply-marketing bases.
Until the year 2000, inter-regional carriage of loads in the north-east alone amounts to about 15 million tonnes. For this reason, construction of the main rail
way line reduces the level of above-normal stocks (approximately by 60-70 percent and leads to redistribution of the role of every form of transport. Thus, if in 1985 the share of railways in the total economy of costs in the system of material-technical supply amounted to 52 percent, in 2005 with active exploitation of the Amur-Yakutsk main line, it could amount to 67 per cent, then with the introduction of the Yakutsk-Anadyr railway line, to 84 per cent. The role of road transport will also increase: correspondingly from 2 to 3 per cent, and then to 5per cent. The role of water transport will materially decrease.
Reduction of costs of industrial production on account of increasing the reliability of deliveries (completing, raw materials, energy carriers) and sales leading to an increase in turnover; thus, reduction of expenses of time of goods haulage by 1 hour within the limits of the northern zone of the Far East as a whole leads approximately to a lowering of the cost of SMR. by 8-9 per cent, the cost of extraction of coal by 4-5 per cent and non-ferrous metals by 1.5-2 per cent. These are extremely high equivalents of a 1 hour saving of time; in the European part of Russia they are 8-9 times lower.
Changing the schemes of delivery, structure (according to forms of transport), and carriage of goods (to a lesser extent, people) with a view to making them cheaper. The mechanism of this source is as follows: with an absolute increase in the volume of goods haulage, the relative load volume (in the calculation per million roubles of national income) is reduced. The share of road and air transport in the north-east of Russia, at present amounting to 83 per cent, will come down to 45-50.per cent.
The revenues from intercontinental haulage (after 2015).
Social effect, being expressed as follows:
Increase in trade turnover and chargeable services, made accessible to the population, the size of which, in the zone of attraction of the main railway line,will grow substantially
Reduction of the withdrawal of the population into the center and stabilization of the qualification potential of the employed, and
Lowering of the chronic sickness and mortality rates due to transport effects (tuberculosis, infections, death of young people)
The investment climate in the zone of building the transcontinental railway (TCR) may be established as favorable according to non-commercial risks and insufficiently favorable according to commercial ones. According to expert estimates, the probability of a return on invested funds to "the year 2020 may be fixed with respect to TCR at the level of 0.85, with respect to the tunnel at the level of 0.3.
The additional expenses arising in the case of realization of the project should also be borne in mind; neutralization of ecological damage, protection and
development of a reservation for the nationalities of the north.
According to the results of research by the firm Geograkom, the reliability of transport provision of the Magadan District (with the Chukotski NO) and Yakutiya, measured in average weighted expenses of time (hours) made up the following picture (Table).
Region Average weighted
expense of time (hr)
1985 1991 2015
Magadan District
Goods traffic
Passenger traffic 28.4
39.5 27.0
38.0 20.0/24.0
32.0/36.0
Yakutiya
Goods traffic
Passenger traffic 45.0
62.2 42.0
60.0 38.0/39.0
55.0/56.0
Value equivalent of Ihr in comparable prices (million roubles)
Magadan District
Yakutiya 28.2
52.3 32.5
59.5 44.0
70.0
Numerator: southern alternative route (TCR).
Denominator: northern route.
As can be seen from Table the value of saving one hour is increasing. If it is based on the forecast expense of time in 2015 after completing the construction of the railway to Anadyr and the main road routes, the effect in comparable prices would amount to 0.31 billion roubles in the Magadan District and 0.28
million roubles in Yakutiya (1988 prices).
The condition of vitality of the intercontinental tunnel project is the construction of the approach railway lines, both m Alaska and north-east Russia, and also the parallel construction of the roads. In this case it should be borne in mind that not less than one-third of the railway from Yakutsk to Anadyr should be funded with investments from abroad (in the first instance in the form of equipment and part-construction of a metallurgical complex in the town of Svobodny, the basic supplier of rolled sections in the future).
Only two of the largest accompanying investment objects have been named, although it would be more correct to talk about the whole program of foreign investments in the creation of an industrial base of transport construction, which at present is extremely lacking in power in the north-east of Russia.
The value of the construction of the main railway lines in comparable prices amounts to 15.2 billion roubles for the southern alternative, 13.2 billion roubles
for the northern one, the collective effect amounts to 0.58 billion roubles and 0.29 billion roubles, the repayment period is25.5 and 45.5 years, respectively. In this
case the southern alternative is obviously preferable.
The prospects of increasing the goods traffic is connected with a considerable degree of development of the zone of attraction of the transcontinental railway
in Yakutiya, in Magadan District and Chukotka. According to data from NIIKTP the volume of rail traffic in the TCR railway attraction zone within the
boundaries of Magadan District in the year 2000 is expected to be at a level of 7.8 million tonnes, somewhat less than this within the limits of Yakutiya. The
total figure is around 15 million to The working of deposits of tin ? cent of all Russian resources), and (total of 50 per cent of all RL resources), gold, wolfram and leacores could become the main sourc increasing goods traffic. Most of t however, are situated in places re: from the proposed TCR route. export of coking coal from s' Yakutiya to Alaska and Canada is being seriously considered by any ol developers.
A characteristic of the Far East : whole is the inertia of export-im{ flows in the direction of Primorye Japan, which will be difficult tolov come and even to balance in the eoi and north directions in connection w the construction of the TCR and the tinel. The mutual complementation of economic structures of north-east Rus; on the one hand, and Alaska and tl Canadian North on the other, cou become an important factor of the exp'diency of the project. On the wholiaccording to the data of IEI DBO RAf1the proportion of mutual trade in thnorthern part of the Pacific Oceai(higher than 50° latitude) amounts t(only 5 per cent of the genera] trade balance of countries in the Pacific Ocean basin.
Proceeding from the proposed structures of sources of revenue follows the proposal of a minimal specific profitability with an aggregate volume of goods
carried of 16 million tonnes a year.
Material for this article was obtained in advance of many political and economic
changes in the region and care should be
taken in interpretation of facts, figures and other data.
http://www.geogracom.ru/investment_e.html
Transcontinental railway and tunnel under Bering Straits
One should distinguish between the short-term and long-term aspects of this project. The short-term aspects encompass the period approximately from 2002 to 2015, when there will probably be construction and the first results of operating the tunnel. The long-term aspects are beyond the limits of 2015, when entercontinental co-operation and involvement in the sphere of exchange with China and south-east Asian countries begin to be fulfilled.
According to various estimates the value of the project varies from $30 billion to $45 billion. Sources of return on investment from the Russian side could
be as follows:
Accelerated involvement in the operation of prospective ore and non-ore useful minerals and their attractiveness for foreign investors as a consequence of the rational cost of extraction owing to relatively low transport costs.
Dramatic broadening of the logging zone useful for exploitation with the primary working of timber.
Essential reduction of budget costs of the state in seasonal transport of loads to the north and liberation (re-profiling) of about 40 large supply-marketing bases.
Until the year 2000, inter-regional carriage of loads in the north-east alone amounts to about 15 million tonnes. For this reason, construction of the main rail
way line reduces the level of above-normal stocks (approximately by 60-70 percent and leads to redistribution of the role of every form of transport. Thus, if in 1985 the share of railways in the total economy of costs in the system of material-technical supply amounted to 52 percent, in 2005 with active exploitation of the Amur-Yakutsk main line, it could amount to 67 per cent, then with the introduction of the Yakutsk-Anadyr railway line, to 84 per cent. The role of road transport will also increase: correspondingly from 2 to 3 per cent, and then to 5per cent. The role of water transport will materially decrease.
Reduction of costs of industrial production on account of increasing the reliability of deliveries (completing, raw materials, energy carriers) and sales leading to an increase in turnover; thus, reduction of expenses of time of goods haulage by 1 hour within the limits of the northern zone of the Far East as a whole leads approximately to a lowering of the cost of SMR. by 8-9 per cent, the cost of extraction of coal by 4-5 per cent and non-ferrous metals by 1.5-2 per cent. These are extremely high equivalents of a 1 hour saving of time; in the European part of Russia they are 8-9 times lower.
Changing the schemes of delivery, structure (according to forms of transport), and carriage of goods (to a lesser extent, people) with a view to making them cheaper. The mechanism of this source is as follows: with an absolute increase in the volume of goods haulage, the relative load volume (in the calculation per million roubles of national income) is reduced. The share of road and air transport in the north-east of Russia, at present amounting to 83 per cent, will come down to 45-50.per cent.
The revenues from intercontinental haulage (after 2015).
Social effect, being expressed as follows:
Increase in trade turnover and chargeable services, made accessible to the population, the size of which, in the zone of attraction of the main railway line,will grow substantially
Reduction of the withdrawal of the population into the center and stabilization of the qualification potential of the employed, and
Lowering of the chronic sickness and mortality rates due to transport effects (tuberculosis, infections, death of young people)
The investment climate in the zone of building the transcontinental railway (TCR) may be established as favorable according to non-commercial risks and insufficiently favorable according to commercial ones. According to expert estimates, the probability of a return on invested funds to "the year 2020 may be fixed with respect to TCR at the level of 0.85, with respect to the tunnel at the level of 0.3.
The additional expenses arising in the case of realization of the project should also be borne in mind; neutralization of ecological damage, protection and
development of a reservation for the nationalities of the north.
According to the results of research by the firm Geograkom, the reliability of transport provision of the Magadan District (with the Chukotski NO) and Yakutiya, measured in average weighted expenses of time (hours) made up the following picture (Table).
Region Average weighted
expense of time (hr)
1985 1991 2015
Magadan District
Goods traffic
Passenger traffic 28.4
39.5 27.0
38.0 20.0/24.0
32.0/36.0
Yakutiya
Goods traffic
Passenger traffic 45.0
62.2 42.0
60.0 38.0/39.0
55.0/56.0
Value equivalent of Ihr in comparable prices (million roubles)
Magadan District
Yakutiya 28.2
52.3 32.5
59.5 44.0
70.0
Numerator: southern alternative route (TCR).
Denominator: northern route.
As can be seen from Table the value of saving one hour is increasing. If it is based on the forecast expense of time in 2015 after completing the construction of the railway to Anadyr and the main road routes, the effect in comparable prices would amount to 0.31 billion roubles in the Magadan District and 0.28
million roubles in Yakutiya (1988 prices).
The condition of vitality of the intercontinental tunnel project is the construction of the approach railway lines, both m Alaska and north-east Russia, and also the parallel construction of the roads. In this case it should be borne in mind that not less than one-third of the railway from Yakutsk to Anadyr should be funded with investments from abroad (in the first instance in the form of equipment and part-construction of a metallurgical complex in the town of Svobodny, the basic supplier of rolled sections in the future).
Only two of the largest accompanying investment objects have been named, although it would be more correct to talk about the whole program of foreign investments in the creation of an industrial base of transport construction, which at present is extremely lacking in power in the north-east of Russia.
The value of the construction of the main railway lines in comparable prices amounts to 15.2 billion roubles for the southern alternative, 13.2 billion roubles
for the northern one, the collective effect amounts to 0.58 billion roubles and 0.29 billion roubles, the repayment period is25.5 and 45.5 years, respectively. In this
case the southern alternative is obviously preferable.
The prospects of increasing the goods traffic is connected with a considerable degree of development of the zone of attraction of the transcontinental railway
in Yakutiya, in Magadan District and Chukotka. According to data from NIIKTP the volume of rail traffic in the TCR railway attraction zone within the
boundaries of Magadan District in the year 2000 is expected to be at a level of 7.8 million tonnes, somewhat less than this within the limits of Yakutiya. The
total figure is around 15 million to The working of deposits of tin ? cent of all Russian resources), and (total of 50 per cent of all RL resources), gold, wolfram and leacores could become the main sourc increasing goods traffic. Most of t however, are situated in places re: from the proposed TCR route. export of coking coal from s' Yakutiya to Alaska and Canada is being seriously considered by any ol developers.
A characteristic of the Far East : whole is the inertia of export-im{ flows in the direction of Primorye Japan, which will be difficult tolov come and even to balance in the eoi and north directions in connection w the construction of the TCR and the tinel. The mutual complementation of economic structures of north-east Rus; on the one hand, and Alaska and tl Canadian North on the other, cou become an important factor of the exp'diency of the project. On the wholiaccording to the data of IEI DBO RAf1the proportion of mutual trade in thnorthern part of the Pacific Oceai(higher than 50° latitude) amounts t(only 5 per cent of the genera] trade balance of countries in the Pacific Ocean basin.
Proceeding from the proposed structures of sources of revenue follows the proposal of a minimal specific profitability with an aggregate volume of goods
carried of 16 million tonnes a year.
Material for this article was obtained in advance of many political and economic
changes in the region and care should be
taken in interpretation of facts, figures and other data.