About
Russia is predominantly continental country where land transportation takes over 95% of cargo and passenger flows. Roads today are the major routes to move cargo and passengers for short and middle distances. However, extent and density of road network in the country is much less then in EU, US or Asia. But the usage is more and more intensive.
Russian automotive market may become the largest in Europe by 2015-2016. However, experts ensure: road infrastructure will become the brake for not only automotive industry but for all the economy. Poor quality of roads, traffic jams are resisting for the most of industries as they increase logistic costs in the total cost of products and thus reduce it's competitiveness. The same is true for automotive industry.
Roads Construction
The majority of Russian highways have high depreciation and merely exhausted their traffic capacity. Russian government is concerned with this problem: recently the program of existing road infrastructure modernization has been adopted and new road constructions started (including toll roads).
Investments in new roads construction and maintenance of existing roads in Russia are less then 2% of GDP while the average level in developed countries is 3-5%. As a result, the rate of transportation costs in industrial products costs in Russia exceeds that in the USA and Western Europe.
According to the statistics, the length of roads with hard coating (tarmac, concrete, crushed rock) in Russia is about 780 thousand km, including 50 thousand km of federal roads and 450 km of regional roads. To compare: roads length in China is over 3.3 million km, in the USA - about 4.4 million km, in France - over 1 million km. The length of roads built in Russia in is lower than in China in a week.
Problems caused by poor road infrastructure in Russia:
- Transportation speed is twice lower;
- Fuel consumption is 1.5 times higher;
- Car maintenance cost is 2-3 times higher;
- Roads' life duration is one third shorter compared to industrially developed countries;
Poor quality of road surface increases transportation costs by 30-50%.
Because of the defects of road surface in Russia approximately 150 000 accidents occur annually and about 20 000 people die, while economy losses are within 6-8% of GDP.
To improve quality and traffic capacity of the most intensively used highways to the acceptable level Russia must construct and reconstruct not less than 2500 km of roads of federal category annually instead of current 1200 km a year - it means 2-3 times more. To solve the road problem in a reasonable period of 10-12 years Russia must commence approximately 15 times more kilometers of roads than it is now.
According to the data from Quantity Surveyors' Union, average cost of road construction in Russia is within $ 60-180 M/km, while in Switzerland it is $ 20-26 M/km, in Germany $ 11-14 M/km, in Poland $ 7-8 M/km, and in USA it is even as low as $ 4-9 M/km.
Is there an explanation for global experience rejection and the absence of government contracts assignment to foreign companies? Taxes will be paid in Russia, quality will improve, and the budget will save. Maybe there is a fear that local road giants may give up in such conditions. Moreover, there is no vision on how to control financial flows in such case.
Nevertheless, there are some positive movements in partnership with overseas road builders such as concession projects for paid highways in Russia, a case of Public-Private Partnership (PPP). The quality has been already assessed by the drivers and the effect is visible now, as on the federal highway M-4 "Don" in Lipetsk region 80% of the drivers choose toll route.
Another possible direction of public private partnership is referred to the development of roadside service at federal highways. According to new procedure road builders prepare sites for exact service units themselves. A businessman is exempted from collecting hundreds of certificates and approvals, getting them all in one package and the users get quality services.
Roadside Services
The niche of roadside service in Russia is actually free. The sector is not developed. Investors are afraid to invest because of contradictions in the law and risk to loose all at once. In the same time the number of drivers grows. The Ministry of Transport of Russia expects more than 1.5 times grow of people traveling by car by 2015.
There is a great demand for camping sites in Russia. Camping sites in Germany are located in every 30 km while in Russia there are only two of them!
Implementation of international experience will help to reduce costs and improve quality of roads and driver services.
