Complications for a Railway Project from Russia to Europe

Austrian Transport Minister Doris Bures on Oct. 2 reaffirmed her country's commitment to
the construction of a broad-gauge railway from Austria to eastern Slovakia that would link
up with existing Russian and Ukrainian rail lines. If completed, the new railway could
increase the volume of overland trade between Europe, Russia and possibly even Asia.
However, there are a number of financial and political hurdles — between the participating
countries and with the European Union — that could slow progress on the project.
Russia, Ukraine, Slovakia and Austria agreed in 2007 to plans to extend an existing broad-
gauge rail line in Russia and Ukraine through Slovakia and into Austria. The primary force
behind the project is Russian Railways, which ostensibly is looking to connect rail lines
between Asia and Europe. In the five years since agreement on the project was reached, only
pre-feasibility studies have been completed. An ongoing feasibility study is supposed to
conclude by the end of 2013, and construction is scheduled to finish by 2016.
Because of the railway project's relatively small scale and the fact that it concerns a less
significant sector — transport — it will not provide anywhere near the strategic value for
Moscow as some of its efforts elsewhere. For instance, Russia has been experimenting with
buying European assets on the cheap during the economic downtown to increase its influence
in the region. Having a stake in European energy companies, energy infrastructure or major
banks gives Moscow the potential to influence important strategic sectors — and Russia is
adept at using its energy resources and financial capital for political ends. But although it
will not be as significant as these other moves, the railway project could increase the volume
of overland trade via Russian Railways. Additionally, increasing rail-based trade on a large
scale would boost Russia's economic security, which is crucial considering the country's
limited ability to exploit seaborne trade routes.

History

The track gauge, or rail gauge, is the distance between the two load-bearing rails of a railway.
The wheel width on rolling stock, such as passenger trains or freight cars, must match the
track gauge in order to move across the rail. Trains and other types of rolling stock cannot
pass from one gauge to another without some form of conversion between gauges. There are
various means of accomplishing this, but all are extremely laborious and time-consuming.
Rail tracks in former territories of the Russian Empire and the Soviet Union were constructed
using broad-gauge track (1,520 millimeter, or roughly 5 feet). Most European railways west
of the Baltic states — as well as 60 percent of the railways in the world — use standard-
gauge track (1,435 millimeter). The origins of the difference in rail gauges between Europe
and the former Soviet Union extend back to the 19th century. For Russia, the different rail
gauge served a strategic military purpose by complicating the ability of hostile militaries to
move troops and materiel into the country by rail.
However, changes in military technology and the current state political relations have
rendered the thinking behind the different rail gauge obsolete. Today, the difference in track
gauge simply creates an economic barrier. Breaks of gauge add delays, cost and
inconvenience to the movement of goods by rail, often hindering regional or international
overland trade. Because of this, according to recent studies, only 5 percent of goods
transported between Asia and Europe are moved by rail. Extending broad-gauge track farther
into Europe would theoretically cut down the time and cost of transporting goods across
Eurasia by train.

In the proposed project, an estimated 400 kilometers (250 miles) of broad-gauge track would
be laid from eastern Slovakia into Austria, most likely running from the city of Kosice to the
Bratislava area. The pre-feasibility study estimated that the new route would decrease the
shipping time from Asia to Western Europe from 35 to 15 days and could attract as much as
16 million tons of new freight traffic annually by 2050. The projected cost of building a
broad-gauge track parallel to the existing, narrower track is around 6.3 billion euros ($8.1
billion), a 1.8 billion-euro increase from initial estimates. The project's proponents argue that
the line would be much more economically viable than the current option (transferring
freight to the narrower gauge in Slovakia) because Austria has better road infrastructure and
more highway links to the rest of the European Union — as well as to Danube River transport
networks.

Obstacles

There are a number of reasons for skepticism about the project's future. The project was
originally agreed to in 2007 but has made very little progress to date. Coming to agreement
over the project's details involves negotiations between representatives of Russian,
Ukrainian, Slovakian and Austrian rail companies as well as government officials from each
country. It is also unclear how the project would be financed, and considering that all four
participating countries are worse off economically than they were a few years ago, financial
negotiations are likely to be difficult.
The European Union could present another obstacle. Developing interoperable freight and
passenger rail networks throughout the territory of all member states is a strategic objective
for Brussels. Accordingly, the European Union is looking to standardize track gauge,
signaling and electrical power systems in all 27 member states. EU funds have been
dedicated to assist the Baltic states in the construction of new, standard-gauge railway lines.
Extending broad-gauge networks into additional European countries would seem to be
contrary this initiative.
Furthermore, until the Trans-Siberian Railway, the single line connecting Russia and China,
is improved and expanded, there will be limits to the amount of Asian goods being shipped
to Western Europe — regardless of whether gauge transfers take place in Austria or
Slovakia. Such improvements to the Trans-Siberian Railway are unlikely considering that
they would constitute one of the most expensive projects Russia has ever undertaken — and
would offer a dubious return on investment. Moreover, most goods going from Asia to
Europe are sent by ship. This is likely to remain the case because seaborne trade is far less
expensive than overland trade, regardless of infrastructure conditions.
However, the railway project could have better prospects for realization in the future.
Russian Railways is currently planning several high-speed rail projects that would connect
Russia to Eastern European countries as part of its overall business strategy. If these projects
gain momentum or are successfully completed, they could spark greater movement on and
support for similar projects. At a broader level, Russian Railways is hoping that increasing
intercontinental rail traffic becomes a trend across Eurasia.
There is also a broader strategic aspect figuring into Russia's calculations concerning
investment in rail infrastructure. Russia has struggled chronically with establishing an
integrated transportation network across its vast and harsh terrain. To add to its transport
troubles, Russia lacks reliable access to any deep warm water ports that could not be easily
blocked in the surrounding straits by more dominant naval powers. Russia simply cannot
hope to compete with the United States' dominance of the world's shipping lanes or contest
with Asian naval forces for regional shipping lanes. Despite the obstacles and limitations of
overland transport, investing in such infrastructure is a matter of national economic security
for Russia.

Source: https://worldview.stratfor.com/article/complications-railway-project-russia-europe