Russian Rail dreams about an $11bn Sakhalin bridge

11 Nov '09
Oleg Kouzbit, Online News Managing Editor

Russian Railways has announced plans to build a railroad and bridge to connect the oil-rich island of Sakhalin to mainland Russia. The six-to-eight-year project may be partially funded by Japan which is eyeing its own European rail transportation corridor. Although the new route would save 7,000km and bring goods to markets two to three times faster, its $10-11bn price tag is raising eyebrows.

National rail operator Russian Railways announced earlier this week that it would back Sakhalin regional authorities in promoting a project that calls for construction of an above- or underwater railroad passage to mainland Russia. With its $10-11bn price tag the project may become one of the largest in Russia’s Far East. It will be discussed in detail at Moscow’s November 19-21 Transportation Forum.

A multi-faceted idea

The project, known as Sakhalin-to-Mainland Russia, is planned to start at Selikhino east of Khabarovsk Region’s Komsolmolsk-on-Amur. From here it will run 240 kilometers to the coast, then hit a 6-to-16-kilometer passage to finally join a redesigned Sakhalin Railroad next to the island’s Nysh Station. The proposed route will cover about 580 kilometers.

The Sakhalin Railroad is in tough shape and needs a drastic revamp; its tracks were built by the Japanese a hundred years ago and its antiquated narrow gauge 1.067 mm track is incompatible with Russia’s 1.520 mm standard.

Rebuilding the tracks will require another five years and a total of $1.7bn to complete, Russian Railways says.

In addition, the project calls for construction of the entirely new Ilyinsky – Uglegorsk railroad on Sakhalin’s west coast.

Timeframes for the construction vary between six and eight years, depending on which approaches the final design calls for.

As for the bridge itself, different scenarios envision a railroad, or a combination rail/highway, or even laying an oil and gas pipe through it.

Options hold, but a bridge looks likelier

Until just recently planners were considering three options: a 12.4-km underwater tunnel, a 6.6-km bridge, and a 16-km fill dam.

The latter was the most intriguing because it would include a hydro power station, or – as a slight variation – a massive conduit inside or above the dam to deliver electricity from one of the Far East’s largest hydro-stations, such as Bureiskaya in Amur Region.

The economics of the dam option also seemed promising, but after environmentalists began to protest about the danger to local bio-communities, followed by a raft of SOS-signals from geologists, the dam option was dropped.

As it turned out, it was the geology report that the bottom in this part of the Strait of Tartary is quicksand and therefore extremely unstable that was the deciding factor.

The jury is still out for the tunnel option, but it looks likely to follow the dam one into a dustbin for the same reason.

Third time the charm?

Russian Rail’s proposal is the third time a Sakhalin-to-Mainland Russia project idea has been floated.

The first was made by Josef Stalin, who personally commanded construction of a tunnel underneath the Strait of Tartary in the early 1950s. Works were only halted when the Soviet leader died in 1953.

The new railroad to be built between Selikhino and the Pacific coast will use part of a roadbed laid sixty years ago.

Then in 2002 lobbyists in the RF government revisited the idea. But this second attempt failed, too, because the then Ministry of Railroads refused to come up with the funding.

Economic benefits and Japanese prospects

This time around, the project has tremendous support from official sources, from Sakhalin Governor Alexander Khoroshavin to the RF Ministry of Transport. Now that Russian Railways has joined the chorus, Sakhalin-to-Mainland Russia’s prospects do seem brighter than ever.

Proponents are upbeat because they view the project in a much broader context. For them it is but a section, a very critical one though, of an envisioned Western Europe – Japan international transportation corridor.

The government project planners have hopes for Japan to shoulder part of the financial burden of this big ticket endeavor. Why? Because the project may be extended to include a huge, 43-km bridge across the Laperuze Strait to Japan’s northernmost island of Hokkaido, thus giving Japan and the entire South-East Asia direct rail access to the whole of Eurasia.

According to the RF Ministry of Transport’s estimates, railroad freight shipments from Asia to Western Europe will be two-to-three times shorter than current seaway ones (an average of 18 days vs. a minimum 40 days).

The Russian Academy of Sciences’ Alexander Granberg believes the project is not only better than using seaways through the Suez Canal in terms of distance, time and economics, but it is far more efficient than shipments by sea to southern ports of Russia’s Far East and then transferring them to rail to Europe via Central Asia.

The Japan – Sakhalin – the Trans-Siberian Railroad – Europe itinerary would save shippers 20-to-30 days and 7,000 kilometers, Mr. Granberg thinks.

If the Laperuze Strait Bridge was included in the project, the payback could be halved from more than 30 years envisioned now, the academician said.

Japan, too, sounds enthusiastic about the Sakhalin – Hokkaido passage idea. Japanese Foreign Ministry spokesman Kazuo Kadama was quoted as saying earlier this year that “…if the project is economically viable, and we can see Russia moving towards it, we will participate in the project.” Tokyo intends to raise this issue in detail at the APEC summit in Vladivostok in 2012.

A grand idea or the Emperor’s New Clothes?

There seems to be little disagreement that Russia and Sakhalin in particular need the new passage. Outside oil and gas, a project of this magnitude could sustain the Sakhalin economy and breathe a new life into Russia’s entire Far East.

The benefits to Japan are also compelling. An island economy with little natural resources, Japan needs to be intensely cost-efficient to continue to be a global player.

The doubters, however, are not convinced. Some claim it’s just another reckless scheme by the Sakhalin governor to milk the national budget.

Others point to the $11bn price tag. Similar projects elsewhere in the world have been completed for as little as $1bn. Critics cite, for example, China’s recently completed 36-kilometer bridge across the Bay of Hangzhou—a colossal project that cost just $1.4bn.

Then there’s the world’s longest suspension bridge (2.9 kilometers) that connected Greece’s Rio and Antirio that came in at only $945m.

Worried about long lead times

Part of the worry is about the long lead times needed to design and build such a complex project. The initial construction phase of Sakhalin-to-Mainland Russia won’t probably begin until after 2012.

Given the global financial crisis and the cost of money, lobbyists are pushing the RF government to speed up the project so federal funds can be secured much sooner.

Standing in their way however are other “top priority” projects that have been delayed or even postponed that are now being given a second look. With Russia’s economy still recovering and promises of government support (like Prime Minister Putin’s recent promise to AvtoVAZ of $2.4bn to make sure the company doesn’t default), analysts don’t expect a decision soon on Sakhalin’s dream.
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