1. Report by Deputy CEO of IERT JSC S.N. Sharapov, D.Sc.(Tech.) at the seminar Russia – EC studies in railway transport; the Eurasian Land Bridge as a tool for bolstering the competitive position of the railway business Report by Deputy CEO of IERT JSC S.N. Sharapov, D.Sc.(Tech.) at the seminar Russia – EC studies in railway transport; the Eurasian Land Bridge as a tool for bolstering the competitive position of the railway business Open Joint-Stock Company Institute of Economy and Transport Development (IERT JSC) Open Joint-Stock Company Institute of Economy and Transport Development (IERT JSC) RZD JSCo within the system of international transport corridors. Establishing a new seamless Eurasian transport corridor Moscow - Bratislava - Vienna Moscow, 16 October 2012 Moscow, 16 October 2012

2. 1 1 Types of transport corridor within the framework of the RETRACK project Tikhomirov corridors MAP LEGEND Types of transport corridors within the RETRACK project MAP LEGEND Types of transport corridors within the RETRACK project - The Transsiberian trunk line - ТRАСЕКА - the Central Corridor - Points of track gauge change

3. 2 2 Diagram of the 1520 mm railway line Moscow - Kiev– Bratislava – Vienna MAP LEGEND - Existing railways - 1520 mm railway line Moscow - Kiev– Bratislava – Vienna - planned line

4. 3 3 On the project forbuilding a Bratislava – Vienna railway with atrack gauge of 1520 mm Berlin Budapest Zagreb Ljubljana Bern Prague France Vienna Kiev Bratislava The quadrilateral MoU signed (Russia, Ukraine, Slovakia, Austria) details the (continued) construction project for a 1520 mm railway line from Košice (Slovakia) to Vienna. Line length ≈500 Km Anticipated volume 16m to 26m tonnes The goal of the project is to connect the Central European railway system with regions of the Transsiberian trunk line, attract freight traffic to the Asia – Russia – Central Europe route and to bolster the competitive advantage of railway transport. Advantages of the new line:  Time of delivery from the East to Europe: 15 days vs. 35 days by sea;  environmentally friendly;  macroeconomic effect for the countries involved.

5. 4 4 International transport corridors West – East corridor North-South corridor Lines under construction and in design stages Alternative sea routes

6. 5 5 The Transsiberian trunk line: a connecting link between Europe and Asia E.g., November 2011, a container train run from the Vostochny port to Shushary station (St Petersburg hub) took 6 days 16 hours. E.g., November 2011, a container train run from the Vostochny port to Shushary station (St Petersburg hub) took 6 days 16 hours. Development of the railway infrastructure Cooperation with international railways and organisations Developing the intermodal transport technology Developing logistics Implementing state-of-the-art information technologies The Transsiberian trunk line is fully electrified and equipped with state-of-the-art signalling automation and IT facilities. RZD JSCo introduces a new transport product, the Transsiberian in Seven Days. By 2015, hauling a container from Western to Eastern Russian along the Transsiberian trunk line will take 7 days. Today the speed is around 1200 Km/day (8 days). The Transsiberian trunk line is fully electrified and equipped with state-of-the-art signalling automation and IT facilities. RZD JSCo introduces a new transport product, the Transsiberian in Seven Days. By 2015, hauling a container from Western to Eastern Russian along the Transsiberian trunk line will take 7 days. Today the speed is around 1200 Km/day (8 days). Measures taken:

7. 6 6 Versions of the line proposed in the interim Feasibility Study of the Project for a Wide Gauge Railway Link between Košice and Vienna developed by Roland Berger Strategy Consultants Total cost of the project: € 6.60 billion Construction cost of the new rail line: € 6.36 billion Cost of terminal construction: € 0.24 billion MAP LEGEND rail lines of the 1520 mm gauge Versions of the line proposed in the interim Feasibility Study of the Project for a Wide Gauge Railway Link between Košice and Vienna developed by Roland Berger Strategy Consultants version 1: plain version 1: plateau version 1: plateau, centre - version 4: modified basic version - basic version / version 5: parallel to the existing line - transloading complexes proposed in the project developed by Roland Berger. BRATISLAVA KOŠICE VIENNA

8. 7 7 The advantages of building railway lines with a track gauge of 1520 mm in countries with a different gauge width In accordance with the construction regulations (STNTs- 01-95, etc.) of the Russian Federation, the load per axle and per unit length, the dimensions of the rolling stock and clearance to obstructions of the 1520 mm railways are substantially greater. For instance, the axle load for 1520 mm is up to 30 tf per axle; for 1435 mm, 22.5 tf/axle The railway network of RZD JSCo provides for hauling heavy wagons and does not require significant adaptation. The Development Strategy of the Railway Transport of the Russian Federation up to 2030 sets the following target parameters for freight wagons for wagon building enterprises: – axle load increase to 27–30 tf/axle; – 30% increase in the time to freight wagon failure -speed increase to 140 km/h; -building platforms with variable gauge wheelsets for container transport. Russian plants produce heavy duty locomotives for heavy freight trains with a weight of 6000 t. Railways of EC countries (1435 mm) cannot accommodate rolling stock with an axle load exceeding the specified limit. For this reason, modernised rolling stock conforming to the EC standard has to be used for mass transport utilising automated track switching, variable gauge wheelsets or carriage replacement. Using wagons with an axle load of 22.5 tf/axle within the 1520 mm gauge railway network will reduce the efficiency of infrastructure use, especially on busy lines

9. 8 8 List of impediments inherent in different corridors and associated with specific problem types (RETRACK) Problem group Operating impediments  power limitations and obsolete infrastructure at stations located at the junctures of sections with differing track gauge and at transloading stations;  customs procedures, delays at border crossings;  power limitations and obsolete infrastructure at stations located at the junctures of sections with differing track gauge and at transloading stations;  customs procedures, delays at border crossings;  numerous technical stops for changing locomotives and drivers;  inadequate throughput capacities at the ports of the TRACECA corridor;  intermodal transport including two sea sections — the TRACECA corridor;  shipments using unit trains mixed with carload shipments;  unpunctuality and unreliable transit times;  numerous technical stops for changing locomotives and drivers;  inadequate throughput capacities at the ports of the TRACECA corridor;  intermodal transport including two sea sections — the TRACECA corridor;  shipments using unit trains mixed with carload shipments;  unpunctuality and unreliable transit times;  optimisation of wagon fleet, especially in Ukraine and in the private sector in Russia: the Transsiberian and Central corridors;  providing wagons: the TRACECA corridor;  providing and allocating flat cars (especially for the Transsiberian);  providing and allocating containers;  optimisation of wagon fleet, especially in Ukraine and in the private sector in Russia: the Transsiberian and Central corridors;  providing wagons: the TRACECA corridor;  providing and allocating flat cars (especially for the Transsiberian);  providing and allocating containers;  Chinese quality certificate;  confirmation of unloading at Chinese container terminals;  differences in administrative rules and freight documentation;  information flows based on manual processing: the Central and TRACECA corridors;  language problems associated with documents in the national or dominant working language or mismatching character sets;  Chinese quality certificate;  confirmation of unloading at Chinese container terminals;  differences in administrative rules and freight documentation;  information flows based on manual processing: the Central and TRACECA corridors;  language problems associated with documents in the national or dominant working language or mismatching character sets; Border crossing Transit time Provision of wagons and containers; Administrative rules and documentation  oversize freight cannot be carried across Caucasus: the TRACECA corridor;  lack of safety in connection with hazardous cargo: the Central corridor;  semi-monopolistic railway structures prohibiting real competition;  differences in the maximum permissible train length and weight; Feasibility of railway shipments Free market Capacities

10. 9 9 Problem group Organisational impediments  Limited interest in continued international development owing to the high share of domestic shipments: the Transsiberian corridor;  lack of funds for investing in the competitive position of the railway infrastructure;  insufficient progress in developing the infrastructure from the political standpoint: the Central corridor;  low/insufficient volume and imbalance of freight traffic, inadequate volumes of goods for organising corridors with scheduled train traffic  Absence of agreements between the countries regarding tariff questions: the TRACECA corridor;  payment is only refunded for booking a ferry on the Caspian Sea: the TRACECA corridor;  customs guarantees with respect to transit shipments: the Transsiberian and Central corridors;  varying criteria for loading equipment in different countries, especially in China (e.g., European tanks are banned in China, Chinese tanks are incompatible with European loading terminals, chemicals in drums are not allowed (they can be handled all over the world except China), etc.)  unfair competition; Capacities Tariffs Organisational and regulatory issues  HR development and training.  lack of a common interpretation of the relevant laws and regulations — TRACECA and the Central Corridor; ReliabilityCapacities Administrative rules and documentation HR Problem group Market impediments  users fail to understand the conditions of shipping, delivery and defining the liabilities of the parties: the TRACECA corridor;  priority given to individual types of freight; Tariffs  high and unstable tariffs. List of impediments inherent in different corridors and associated with specific problem types (RETRACK)

11. 10  Differing electrical systems on different sections;  different signalling / control systems on certain sections;  different track gauge; Transit time Reliability  lack of modern monitoring and tracking equipment: the Central Corridor, TRACECA; Border crossing  Inefficient and obsolete track standards at transloading stations between the European and Russian tracks List of impediments inherent in different corridors and associated with specific problem types (RETRACK) Problem group Technical impediments

12. Open Joint-Stock Company Institute of Economy and Transport Development (IERT JSC) Open Joint-Stock Company Institute of Economy and Transport Development (IERT JSC) Thank you !