Russian Railways and Siemens Rail Systems partner on transportation improvements

 In December 2011, Russian Railways (RZD) placed an order for eight "Velaro RUS" high-speed trains including a maintenance contract valid for 30 years. Once operational, the order will double the Russian high-speed locomotive fleet. Worth an estimated €600 million ($798 million), the final order will be delivered in January 2014, just in time for the 2014 Sochi Winter Olympics.  Modern Russia spoke to Siemens Rail Systems Division CEO Dr. Hans-Joerg Grundmann about the recent deal and his company’s prospects in Russia.

Siemens Railways Division and Russian Railways have recently signed a contract on the supply of eight Velaro RUS high-speed trains, making you the most successful non-Russian supplier in the Russian market. What are the reasons for this success, compared to your competitors?

Siemens has been doing business in Russia for 160 years. Today, it employs nearly 3,000 people and is successful in all four of its main business sectors there. The open door to the Russian railroad industry for us was, without a doubt, the order for the first eight Velaro RUS high-speed trains that we won in 2006. Since the end of 2009, these trains have run between Moscow, St. Petersburg and Nizhny Novgorod with a punctuality rate of around 99 percent. The high level of satisfaction of our customer RZD, combined with our close strategic partnership with them has led to further deals. In cooperation with other Russian companies, we are manufacturing around 200 sleeping cars, 220 freight locomotives and about 1,200 cars for our Desiro RUS regional train for use by RZD. The Desiro RUS regional train order alone is worth over €2 billion ($2.6 billion) – our company’s largest-ever in Russia.

What are the distinctive characteristics of the new Sapsan trains that make them suitable for the Russian market?

Thanks to its unique platform design, the Velaro high-speed train, known in Russia as the Sapsan, can be easily adjusted to fit different railroad networks and customer requirements. It differs distinctly from the German Velaro version – the new ICE 3 – in its wider gauge and length.  Furthermore, we have adapted features such as the technology, insulation, heating, trucks and lubricants to Russia’s extreme climate conditions so the train can operate in temperatures as low as -50° C (-58°F). These upgrades protect the traction components from icing up while at the same time adequately cooling them to avoid overheating.  In winter operations, the cool air is taken from the roof via special air channels.  The train is so dynamic that the Sapsan’s Spanish equivalent regularly operates at temperatures of up to +50° C (122°F) - meaning we can run these trains across a temperature range of 100° C (212°F).

As shown by this new connection between Moscow and St. Petersburg, railway travel is gaining more importance in Russia. How would you assess the prospects for further growth for Siemens in this context?

Russia is a highly attractive market for Siemens Rail Systems Division, mainly due to its 88,000 kilometers of permanent rail lines. In terms of size, Russia has the world’s second-largest railroad network after the United States and has ambitious plans for the future. RZD plans on buying around 23,000 new locomotives and 24,000 new regional train sets by 2030. All in all, Siemens Rail Systems Division has secured orders worth around €5 billion ($6.5 billion) from Russia since 2006, including the latest order for a further eight Velaro trains in December 2011.

More generally, the improvement of Russia’s infrastructure is one of the main challenges Russia faces and one of the government’s stated priorities. How would you describe the situation at the moment and where can progress still be made?

Economically, Russia is making good progress, which is why Siemens, along with local partners, is investing around €1 billion ($1.3 billion) here over the next three years to help expand rail infrastructure. It is not just a matter of trains and locomotives, but of developing, manufacturing and maintaining the current system by using, for example, gas and wind turbines, drive units, and high voltage technology. All in all, Siemens aims to establish and develop more than 10 production sites in regions such as Yekaterinburg, Perm, St. Petersburg and Voronezh.

The Moscow-St. Petersburg railway connection will play a particularly important role in the 2014 Sochi Olympics and the 2018 FIFA World Cup.  What can you tell us about Siemens’ involvement in these events? 

One of our most important projects in connection with the 2014 Sochi Winter Olympics is to supply and maintain 54 Desiro RUS regional train sets whose task will be to take athletes and spectators from the airport to the Olympic Park at speeds up to 160 km/h. The first 38 trains are under construction in Germany and will be taken into service by RZD as “Lastoshkas” from the fall of 2013. The remaining 16 units will be manufactured starting at the end of 2012 with a growing level of localization in Yekaterinburg, where we are setting up a factory to make 1,200 additional railcars worth an investment of around €200 million ($262 million). In addition, Siemens is supplying Sochi with other products for eco-friendly power generation: water supplies, healthcare, building services and security. For the 2018 World Cup, we are in discussions with the Kaliningrad region on ways Siemens can contribute toward the success of the events taking place there. 

Siemens Rail Systems Division, based in Berlin, Germany, is an international leader in providing rolling stock and related services. Its portfolio covers a full range of vehicles – from railroad and metro cars to locomotives, trams and light-rail vehicles. The Division combines competence in the areas of local, long-distance, and logistical transport to offer comprehensive expertise for environmentally friendly, efficient, and reliable rail vehicles, which are already in use in more than 40 countries. For more information, visit http://www.siemens.com/rail-systems.