OREANDA-NEWS. June 28, 2013. The national railway companies of Russia, Kazakhstan and Belarus have signed an agreement to establish an Integrated Transport & Logistics Company (ITLC) to transport containerised goods within the Common Economic Space (CES) and on transit routes between Europe and Asia.

Currently, ITLC is one of the few real business projects in the framework of CES integration and the only one aimed at consolidating infrastructure. Setting up the ITLC will facilitate the formation of an infrastructure platform to implement other large-scale economic projects within the CES, while investment in the ITLC will serve the transportation needs of the member countries of the Customs Union and the neighbouring countries on a modern level.

The document was signed at the St. Petersburg International Economic Forum in the presence of heads of state from Russia, Kazakhstan and Belarus by Vladimir Yakunin, President of Russian Railways, Askar Mamin, President of Kazakhstan Temir Joly (Kazakhstan Railways), and Vladimir Morozov, CEO of Belarusian Railways.

As the agreement states, the OTLK is being set up as a joint stock company. After obtaining consent from government authorities, contributions to the share capital will be made in the form of stock or equity in the operating companies of rolling stock and terminals (OJSC TransContainer, JSC Kedentransservice, JSC Kaztransservice etc.) and transportation and logistics companies (JSC RZD Logistics), as well as wagons for transporting containers, containers and rail freight terminal property necessary for operations at the railway stations Zabaykalsk in Russia, Dostyk and Altynkol in Kazakhstan and Brest-Severny in Belarus.

The property transferred as payment for shares in ITLC will be paid in at market prices as assessed by an independent valuer from a leading international company.

The project will bring significant financial benefits to both the shareholders and CES member states. According to the business plan, ITLC's total freight turnover will exceed 4 million Twenty-Foot Equivalent Units (TEUs) by 2020. Additional revenues for the national railway companies for the use of the infrastructure will be about USD1.6 billion by 2020. According to estimates, the cumulative contribution to the GDP of the CES member states by 2020 will reach USD11.3 billion, with nearly USD5 billion accruing to Russia, USD5.3 billion to Kazakhstan and about USD1 billion to Belarus.

To ensure the growth of domestic and international transportation, including transit, ITLC will invest a total of around USD6.2 billion in rolling stock, containers, terminals and IT infrastructure by 2020. The capital expenditure will be financed from OTLK equity and debt without recourse to any additional resources from the company's founders.