International Engineering and Transportation Construction

In 2015, Russian Railways continued implementing initiatives and projects that aim to strengthen the Company’s competitiveness on the international passenger and freight transportation market as well as ensure the integration of the national railway network into the Eurasian transportation and logistics system. The Company fully met its contractual obligations as part of projects to develop railway infrastructure abroad and undertook measures to develop new and promising markets.

Key achievements of business unit in 2015

1. Russian Railways continued implementing measures to achieve the goals set forth in the Group’s Development Strategy and Long-term Development Programme. Two major projects helped the Group to meet its objectives — the construction and modernisation of railway infrastructure in Serbia and the North Korean project Khasan-Rason. Most of the business unit’s revenue was generated by income from the implementation of projects to build the Belgrade-Pancevo railway line and northern sections of the Corridor X Pan-European railway in Serbia. The business unit had revenue of RUB 5.3 bln in 2015, an increase of more than 380% from the results of the previous year.
2. Interaction with countries of the Asian-Pacific Region intensified significantly, above all with China, North Korea and Mongolia, in the implementation of joint projects
3. The Russian Railways Group continued implementing infrastructure projects abroad in accordance with previously signed agreements and memorandums

Activities of business unit

The international infrastructure projects being implemented by the Russian Railways Group may be roughly classified as follows:

• Complex projects that involve the design, construction and supply of the necessary equipment to maintain and operate the infrastructure facilities that are built. The main economic effect for the Russian Railways Group from implementing projects is the ability to include such railway systems in logistics chains that operate using the Company’s infrastructure on the East-West and North-South routes. Examples of such projects can be found in Armenia, Mongolia and North Korea.
• Construction projects in which companies of the Russian Railways Group operate as contractors during the design and performance of construction work. The economic effect for the Russian Railways Group from implementing projects in this group is the profit generated from the work performed. A project in Serbia is an example of this.