Business news

BREST, 14 August (BelTA) – The Brest division of Belarusian Railways and the Russian company PAO TransContainer plan to set up a joint venture to provide transportation and logistics services in the sphere of container transportation. The project to set up the joint venture was discussed at a coordinating conference of heads of transportation and logistics companies of Belarus, Russia, Kazakhstan, and Germany on 13 August, BelTA has learned.

The joint venture will become part of United Transport and Logistics Company (UTLC) that was set up in December 2014 by the Customs Union member states for the sake of organizing container transportation by rail. The new joint venture will become the key infrastructure service platform of United Transport and Logistics Company. According to UTLC President Piotr Baskakov, the project is in the final readiness stage. The work on the property assessment report and the business plan has been finished. The foundation agreement and the charter are being finished. “We plan to set up the joint venture by the end of the year. In accordance with our business plan the investments will be recouped within nine years,” said the UTLC CEO.

The joint venture is meant to increase container transportation by rail along the second international transport corridor and the China-Europe transit route. The total volume of investments is estimated at $6.6 million. The Belarusian side will make a non-monetary contribution in the form of terminal assets at the railroad station Brest North. The Russian side will contribute $1 million that will be spent on buying new equipment, renewing the cargo-loading mechanisms, and building a new IT system. The Belarusian and Russian sides will account for 86% and 14% of the investment resources respectively.

Apart from conventional reloading services the joint venture is supposed to offer comprehensive solutions, including innovative services. Those may include customs clearance of transit cargoes, organization of small-batch cargo deliveries. This kind of service represents a very competitive segment of the transportation and logistics market. Specialists believe the demand for it will be rather high. First Deputy Head of Belarusian Railways Vladimir Mikhailyuk said, the current choice of basic services of the Brest division will be expanded with new kinds of services.

According to the source, Brest has rather well-developed infrastructure. The facilities allow reloading up to 700 railway cars and over 900 containers per day and storing up to 1,590 containers. At present 100 cars are reloaded at the Brest railway node per day on the average. So the new business will have space to grow into, noted the executive.

According to Belarusian First Deputy Transport and Communications Minister Yevgeny Rogachev, the project to set up the container transportation joint venture has appeal for Belarus. “We are interested in getting our transit corridor developed. We hope that the tasks specified by the business plan will be accomplished,” said the official.

Belarusian Railways expects the volume of container transportation via Belarusian railroads to increase by 350% by 2020. In H1 2015 as much as 3.7 million tonnes of transit cargoes was transported between the West and the East.