Project “Belkomur”

The complex industrial and infrastructural development program of Komi Republic, Perm Territory and Arkhangelsk area.

“Belkomur” project description

The complex industrial and infrastructural development program of Komi Republic, Perm Territory and Arkhangelsk area.

Project goals

The complex program provides implementation of regional enterprise investment projects and construction of trunk-railway Solikamsk – Arkhangelsk that will liquidate infrastructural dead ends, provide the access to raw material resources that are not used nowadays and create new short transit routes connecting the Ural Mountains and Siberia with northern Russian ports.

Project importance for national economy

• Involving of previously unused territories into economic life

• Creation of new Russian transit point for foreign trade cargos.

• Creation of new profitable industrial objects and workplaces.

• Creation of a short route connecting the regions of the country.

• Creation of a new international transit transport corridor.

Primary project objectives• Creation of new enterprises and industrial objects in

Bereznikovo - Solikamsk industrial hub of Perm Territory.

• Modernization and creation of new enterprises and industrial objects in Komi Republic.

• Construction of a new deep-water seaport in Arkhangelsk area.

• Construction of trunk-railway Solikamsk - Arkhangelsk.

• Total amount of project investments comprises 8 billion Euro.

Construction of trunk-railway Solikamsk – Gainy – Syktyvkar – Arkhangelsk (Belkomur).

Total railway mileage – 1252 km Including new construction – 795 km

Total investment volume – 2 billion Euro

Position of the trunk-railway

in comparison with world,

trans-Eurasia and Russian

transportation corridors

New railroad construction within Northern East – West (NEW) transportation corridor

New railroad construction within Eurasian transportation corridor

Belkomur and main Russian transportation corridors

Logistics

Freight flows

Transshipment points

Main technical and economic construction parameters

and the advantages of new trunk-railway

Solikamsk – Gainy – Syktyvkar – Arkhangelsk (Belkomur)

Main advantages of new trunk-railroad construction

Involving of previously unused territories that are inaccessible by transport into economic life, and consequently, uncultivated territory development.

Possible use of previously inaccessible forest recourses that comprise over 6 million m3.

Project “Belkomur” technical and economic features

Total railway mileage – 1252 kmincluding new construction – 795 km

Including mileage in Perm Territory – 392 kmin Komi republic– 243 km

in Arkhangelsk area – 160 km

Project “Belkomur” technical and economic features

Total construction cost – 2 billion Euro

Including: “Southern site” – 1.51 billion Euro“Northern site” – 485 million Euro

Project “Belkomur” technical and economic features

The pay-back period comprises 6.5 – 9 yearsdepending on a funding source.

Internal rate of return 27,5 %margin of profit is over 2,5%

Main advantages of new trunk-railroad construction

1. Cargo run reduction from the Urals to the ports of Arkhangelsk and Murmansk, as well as to the ports of Finland up to 800 km that reduces cost by 40 %.

2. Resolving railroad dead ends in the territory of three subjects of the Russian Federation

Main advantages of new trunk-railroad construction

3. Involving of previously unused territories that are inaccessible by transport into economic life, and consequently, uncultivated territory development.

4. Possible use of previously inaccessible forest recourses that comprise over 6 million m3

The state-private partnershipProject implementation is supposed to be financed by the

Investment fund of the Russian Federation. The state support is rendered to projects aimed at creation

and development of an infrastructure of national importance.

The Investment Fund finances designing and further construction of infrastructural objects (the railway and berthing structures of a new port, in our project) that will remain state joint stock companies’ property.

The objects that remain private investors’ property are financed by private capital.

From the address of the President of the Russian Federation Vladimir Putin to the Federal Assembly of the

Russian Federation:

“…What concerns the projects financed by development institutions, they should be devoted to the resolving of major economy problems. Budgetary funds should not play the main role here, but serve as a catalyst for private investments. Putting budgetary funds in economy, the state should grant its support in the spheres where the risks for private investors are still too high.”

Short description of the participants of Komi republic project

Total volume of investments by 2012 – about 2,53 billion Euro.

23 million tons of freight flow a

year (2006)

Industrial production volume increase by more than 571 million

Euro by 2010-2012.

Freight flow increase by 40-50% by 2010-2012

YaregaRuda JSC

Severstal-Resurs CJSCKomi Aluminiy CJSC

Syktyvkar timber processing complex, JSC

Short description of Bereznikovo - Solikamsk industrial hub of Perm

Territory

Territory – 5473 km2 Population – 327,600

35 major and medium industrial objectsGoods produced and shipped in 2006 to the

amount of 2,38 billion Euro.

Annual freight flow: 20 million tons.25% of industrial production of the Territory.

20% of working places.

Verkhnekamsk deposit of potassium and magnesium

salts is the base for Bereznikovo-Solikamsk

industrial hub development

Rock salt: 734,3 million tons.

Magnesium salt: 71413 million tons.

Potassium salt: 52 296 million tons.

Oil: 50 million tons.

Total volume of investments by 2012 – about 2 billion Euro.

Industrial production volume increase by more than 571 million Euro by 2010-2012.

Freight flow increase by 30-40% by 2010-2012.

Uralkaliy-Silvinit JSCSolikamskbumprom JSC

Soda-khlorat ltd.Bereznikovo soda plant ltd.

VSMPO-AVISMA corporation.

Investment program of Bereznikovo-Solikamsk industrial

hub enterprises

Arkhangelsk area Deep-water port

Annual freight flow: 30 million tons.Total volume of state and privatecapital investments: 1.28 billionEuro. More than 9000 workplaces. Reception of vessels with a deadweight over 70,000 tons.

Kholmogory gypsum deposit

Investment project on gypsummining by domestic investors and

Knauf company.

New deep-water

seaport

New deep-water Arkhangelsk seaport location.

Operating Arkhangelsk

port

New deep-water Arkhangelsk seaport

New trunk-railroad with 55 km mileage

is a part of “Strategic plan

of Russian railways development up to 2030.”

New deep-water Arkhangelsk seaport draft