OSJD Activities in the Field of Passenger and Freight Transport

ORGANIZATION FOR CO-OPERATION OF RAILWAYS (OSJD) OSJD Activities in the Field of Passenger and Freight Transport Zubaida ASPAYEVA Chairperson of OSJD Commission on Freight

MAIN DIRECTIONS OF WORK IN THE FIELD OF FREIGHT TRANSPORT Application of unified tariff conditions in international transit freight traffic (determining common rules for calculating carriage charges, basic level of tariff rates for transit transportation of goods) Use of freight wagons in international traffic with a single system of rules Development of combined transport between Europe and Asia, use of technical equipment in combined transport (organizational and operational aspects of combined transport between Europe and Asia) Organization of freight transport under the common CIM/SMGS consignment note between Europe and Asia Organization of goods transportation in large containers in the traffic Europe-Asia-Europe, including the implementation of joint UNESCAP-OSJD projects Application of unified system of description and coding of goods in international traffic (Harmonized Nomenclature of Goods) Development of the Directory of OSJD Freight Stations Development and coordination of time-tables for freight trains in international traffic Coordination of volumes and conditions for transportation of export, import and transit goods in international traffic Improvement of accounting for international freight transport

MAIN DIRECTIONS OF WORK IN THE FIELD OF PASSENGER TRANSPORT Development and improvement of international passenger transport Use of common tariff rules in transportation of passengers, luggage and load-luggage in international traffic. Use of passenger wagons in international traffic under common rules Agreement on time-tables and schemes for composing the passenger trains in international traffic Seat reservation system, information services for passengers Improvement of accountings for international passenger transportation

VOLUMINOUG PERFORMANCE INDICES OF FREIGHT TRAFFIC Freight Turnover, mln.tkm Volumes of Traffic, mln.tn 4574 5365 5112 5816 6190 5403 5494 5881 5743 5354 5276 5473 4864 4842 2009 2010 2011 2012 2013 2014 2015

VOLUMINOUG PERFORMANCE INDICES OF PASSENGER TRAFFIC Passenger-kilometres, mln. Volumes of Traffic, mln.passengers 3911 3786 3870 3903 3916 3916 3575 1221 1151 1208 1200 1198 1193 1101 2009 2010 2011 2012 2013 2014 2015

TARIFF ISSUES IN THE FIELD OF FREIGHT TRANSPORT Legal basis of transit freight transport Scope of Agreement on ETT Parties to the Agreement on Unified Transit Tariff (ЕТТ) railways of Azerbaijan, Belarus, Bulgaria, Vietnam, Georgia, Kazakhstan, China, DPRK, Kyrgyzstan, Latvia, Moldova, Mongolia, Ministry of Transport of Russian Federation, Tajikistan, Uzbekistan, Ministry of Infrastructure of Ukraine, Estonia Parties to the Agreement on International Railway Transit Tariff (МТТ) railways of Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Ministry of Transport of Russian Federation, Tajikistan, Uzbekistan, Ukraine, Czech Republic, Estonia Scope of Agreement on MTT Tariff conditions in transportation of transit goods ETT and MTT tariffs provide: - basic level of tariff rates; - application of unified tariff rules (common and specific); - common procedure for calculation and levying carriage charges for transit transportations as well as when transport of goods is performed via border and port stations, reforwarding stations to / from road, air, water and pipeline transport in transit directions; - Possibility of providing discounts contain information: - calculation tables of tariff rates for transportation of goods in wagons and containers; - list and amounts of rates for additional charges; - tables of transit distances

Improvement of Agreements on Unified Transit Tariff (ETT) and International Railway Transit Tariff (MTT). Updating of ETT and MTT tariffs Changing and amending the ETT and MTT Agreements as well as ETT and MTT tariffs, in particular connected with changes to SMGS. Changes and amendments to Agreements and Tariffs are proposed by the Parties to the Agreements taking into account their interests, based on periodic assessment of transport market, in particular the level of railway freight tariffs for transit transport on international market as well as the level of freight tariffs of other modes of transport applied in the scope of ETT and MTT

TARIFF ISSUES IN THE FIELD OF PASSENGER TRANSPORT Legal framework in transportation of passengers, luggage and load-luggage in international traffic Scope of Agreement on MPT Parties to the Agreement on International Railway Passenger Tariff (MPТ) railways of Belarus, Vietnam, Kazakhstan, China, DPRK, Kyrgyzstan, Latvia, Lithuania, Mongolia, Russian Federation, Tajikistan, Turkmenistan, Uzbekistan, Ukraine, Estonia Tariff conditions in transportation of passengers, luggage and load-luggage MPT Tariff provides: - Basic level of charges for transportation of passengers, luggage and load-luggage by rail; - Use of common tariff rules; - Common procedure on calculating charges for transportation of passengers, luggage and load-luggage in international traffic; - Possibility of providing benefits and discounts contains the following information: - list of stations from and to which passengers, luggage and load-luggage can be transported in international traffic; - Tables of distances for transportation by rail in individual countries between points included in international passenger traffic; - Basic table of freight charges for the carriage of passengers and the cost of reserved seats in sleeping cars and in wagons with couchettes; - Basic table of charges for transportation of luggage and load-luggage; - The charges for the declared value of luggage and load-luggage.

RULES FOR THE USE OF FREIGHT WAGONS IN INTERNATIONAL TRAFFIC Parties to the Agreement on the Rules for the use of freight wagons in international traffic (PGV) are railways of Belarus, Bulgaria, Hungary, Iran, Kazakhstan, China, DPRK, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Poland, Russia, Romania, Slovakia, Tajikistan, Uzbekistan, Ukraine and Estonia. The Rules for the use of freight wagons in international traffic (PGV) make it possible to apply common operational and technical rules for unhampered use of wagons in the traffic without unloading in organization of goods transportation on several railways with different gauges. The Rules ensure the efficiency of railway transport and increase its competitiveness. Scope of Agreement on PGV PGV determines: - conditions for freight wagons accepted for operation - procedures for providing freight wagons - transfer and return of freight wagons - conditions for the use of freight wagons - operation of freight wagons - fare rates for the use of freight wagons in international traffic - compensation for the use of freight wagons (rates for repair of freight wagons etc.)

RULES FOR THE USE OF FREIGHT WAGONS IN INTERNATIONAL TRAFFIC Improvement of the Agreement on PGV and updating the Rules for the use of freight wagons in international traffic (PGV) Yearly work on improving the Agreement on PGV and updating the Rules by changing and amending. PGV revision took 6 years. These work has been completed. Comprehensive changes and amendments to the Agreement on PGV and PGV will come into effect from 1 July 2017.

RULES FOR THE USE OF PASSENGER WAGONS IN INTERNATIONAL TRAFFIC Parties to the Agreement on the Rules for the use of passenger wagons in international traffic (PPV) are railways of Belarus, Bulgaria, Hungary, Georgia, Kazakhstan, China, DPRK, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Poland, Russia, Romania, Slovakia, Tajikistan, Uzbekistan, Ukraine and Estonia. The Rules for the use of passenger wagons in international traffic (PPV) allow to apply common operational and technical rules for the unhindered use of passenger wagons in international traffic in transportation of passengers, luggage and load-luggage on several railways with different gauges and contribute to ensuring the efficiency of rail transport and improving the quality of services provided PPV determines: Scope of Agreement on PPV - conditions for passenger wagons accepted for operation - procedures for providing passenger wagons - transfer and return of passenger wagons - conditions for the use of passenger wagons - operation of passenger wagons - Cleaning and disinfection of passenger wagons - Technical requirements for passenger wagons in international traffic - Compensation for lost passenger wagons (prices for repair of wagons and other calculations )

Development of Combined Transport between Europe and Asia The work on the development and organization of combined transport in international traffic is carried out within the framework of the Agreement on organizational and operational aspects of combined transport between Europe-Asia (1997) The Agreement is developed on the basis of the European Agreement on Important International Combined Transport Lines and Related Installations (AGTC) Parties to the Agreement 15 OSJD member-countries: Belarus, Bulgaria, Hungary, Kazakhstan, China, Kyrgyzstan, Latvia, Moldova, Mongolia, Poland, Russia, Slovakia, Uzbekistan, Ukraine, Estonia. The Czech Republic is actively involved in this work The aim of the Agreement creating a common Europe-Asia transport system Updating and improving are performed by making changes and amendments to the Agreement and Appendices to the Agreement (railway lines, terminals and border crossing points, transshipment stations, railway stations equipped with AGCS system, railway-ferry crossings within international transport network, technical specifications of railway lines; operational specifications of transportation and minimum requirements for infrastructure) Application of OSJD Leaflet R 407 Technical and operational requirements for facilities of combined traffic (elaboration of draft changes and amendments)

APPLYING THE COMMON SYSTEM OF DESCRIPTION AND CODING OF GOODS IN INTERNATIONAL TRAFFIC OSJD Harmonized Nomenclature of Goods (GNG) is developed on the basis of the Harmonized System of Description and Coding of Goods (HS) of the World Customs Organization (WCO) and Harmonized Commodity Code (NHM) of the International Union of Railways (UIC), which is applied by European railways. GNG codes contain eight digits. The first six digits are identical with the HS and Combined Nomenclature of Customs Tariffs of the European Union CN. Railways of OSJD member-countries (Parties to SMGS) carry out annual work on updating the GNG. The leading GNG developer in OSJD is JSC Russian Railways. Text of GNG has the following structure: Main provisions on GNG List of GNG positions Analytical list of goods Alphabetical list of goods

DIRECTORY OF FREIGHT STATIONS Developing the Directory of Freight Stations of OSJD Railways The Directory of Freight Stations contains data from the railways of OSJD member-countries: Azerbaijan, Afghanistan, Belarus, Bulgaria, Hungary, Vietnam, Georgia, Iran, Kazakhstan, China, DRPK, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Poland, Russia, Romania, Slovakia, Tajikistan, Uzbekistan, Ukraine, Czech Republic and Estonia. The data are provided in accordance with provisions of OSJD Leaflet O 405 Rules for Developing and Supporting the Directory of Freight Stations of OSJD Railways.

ORGANIZATION OF LARGE-CONTAINER TRAFFIC IN COMMUNICATION BETWEEN EUROPE AND ASIA The organization of container transportations, including container block trains and piggyback transportation in the traffic between Europe and Asia, is one of the priority directions in OSJD activities. According to the data for 2016, 200 container trains have been running on the OSJD railways including piggy-back transportation on the permanent basis, and 278 container trains depart when ready. Producing a database on the goods transportation volumes carried in large containers on the OSJD railways in 2015 on the basis of the data provided by the railways of Azerbaijan, Belarus, Bulgaria, Kazakhstan, China, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Poland, Russia, Slovakia, Uzbekistan, Ukraine, Czech Republic and Estonia. In 2015 the OSJD railways admitted for transportation 1 759 thousand TEUs and handed over 1 960 thousand TEUs.

ORGANIZATION OF CONTAINER TRAINS IN COMMUNICATION BETWEEN EUROPE AND ASIA 2014-1041 container trains 2015-1269 container trains 2016-1913 container trains Brest Zabaykals, Zabaykalsk Brest, 12 days Suzhou Warsaw, 13 days Busan Nakhodka Sergeli/Аblyk, 28 days Busan Brest/Dobra, 24 days Nachodka Hamburg, 18 days

ORGANIZATION OF CONTAINER TRAINS IN COMMUNICATION BETWEEN EUROPE AND ASIA Duisburg Duisburg Route Chongqing - Duisburg Duisburg- Chongqing Wuhan - Pardubice Chengdu - Lodz Zhengzhou - Hamburg Hamburg - Zhengzhou Hamburg Hamburg Lodz Lodz Transport volume of container train Chongqing-Duisburg Year 2013 2014 2015 2016 Transport volume(teu) Pardubice Pardubice Dist., km Speed, km/day Brest Brest Krasnoe Krasnoe Underway time, days. Number of trains 2015 Number of trains 2016 10769 677 16 146 209 10769 677 16 118 128 10569 768 14 23 6 9600 791 13,6 61 186 10214 670 17 49 47 10214 670 17 32 48 1745 3875 7052 10019 Number of trains 35 91 146 209 Iletsk Iletsk Altynkol Altynkol Dostyk Dostyk Established Joint Venture «YuXinOu (Chongqing) Logistics company Ltd.» CQCT (Government of Chongqing) Consigner: Hewlett Packard China, Acer Cargo: computer hardware Designation Chengdu Chengdu Route Chongqing-Duisburg (from19.03.2011 ) Duisburg-Chongqing (from March 2013 ) Wuhan-Parduibice (from 05.06.2014 ) Chengdu-Dostyk-Lodz (from 19.12.2012) Zhengzhou-Hamburg (from 17.07.2013 ) Hamburg-Zhengzhou (new route, September 2014) Chengdu-Altynkol-Lodz Zhengzhou Zhengzhou Chongqing Chongqing Wuhan Wuhan

Unified CIM/SMGS Consignment Note Advantages of using the Unified Consignment Note Reduction of delays at border crossing points (up to 10-12 hours) Reduction of freight costs for the sum of documents re-issuing process Simplification of customs procedures due to acceptance of CIM/SMGS consignment note as a transit customs and bank document Provision of strong legal guarantees (the route is clearly defined, the transport costs are divided, compensation provided in case of freight loss or damage) Absence of system errors in documents re-issuing process Overall reduction in document flow due to the possibility of using electronic version of the consignment note

ORGANIZATION OF GOODS TRANSPORTATION UNDER CIM/SMGS CONSIGNMENT NOTE Name of Railway Administration Belarus railway Chinese Railways SE «Railway of Moldova» JSC «Polish State Railways» (JSC PKP CARGO) JSC «Russian Railways» Direction of transportation Transit, incl.: West East East West From China to Germany (Chongqing Duisburg) Consignments in total, incl..: transit/import from Poland and Romania/export Consignments in total, incl.: West East East West Consignments in total, incl.: export/import/transit, incl.: number of containers: export/import/ transit Volume 29050 containers: 11639 17411 7052 containers 146 container trains 24583 consignments: 23160/439/984 4749 consignments: 1090 3659 35 807 consignments: 15028/15319/5460 61557 containers: 27751/28441/5365 PJSC «Ukrainian Railway» JSC Czech Railways (CD Cargo) Consignments in total, incl.: transit/import/export, wagon/container load Consignments in total, incl.: wagon/container load 79128 consignments: 18040/1149/56939, 67972/8156 43307 consignments: 2673/40634

ORGANIZATION OF GOODS TRANSPORTATION UNDER CIM/SMGS CONSIGNMENT NOTE Container train on the route Chongqing Duisburg under CIM/SMGS consignment note Krasnoe Malaszewicze Iletsk Duisburg Brest Dostyk Alashankou Chongqing China Kazakhstan Russia Belarus Poland/Germany Total Distance, km 3777 3025 2058 609 1300 10769 Price for container, USD 3400 1060 1924 506 1480 8370 Rate per unit, cont./km, USD 0,90 0,35 0,93 0,83 1,12 0,78 Share in total distance, % China Kazakhstan Russia Belarus Poland/Germany 35% 28% 19% 6% 12%

JOINT UNESCAP-OSJD PROJECTS ON ORGANIZATION OF CONTAINER TRAINS Russian Far East to Poland 10,350 km 12.5 days Malaszewicze Brest Ulan-Bator From Belarus to Mongolia 7,200 km 8.5 days Almaty Tianjin Vostochny Lianyungang From China to Kazakhstan 5,020 km 7.5 days From China to Mongolia 1,700 km 3 days

ORGANISATION OF BLOCK CONTAINER TRAINS Advantages in organization of block trains runs along OSJD Land Corridors in comparison with sea transportation between countries of South-East Asia and Europe: Commercial speed up to 1000 km/day Distance of transportation Delivery time Competitive tariff rate Level of transport services. Underway time on sea 35-45 days Underway time on land corridors - about 12-25 days (depending on route direction)

TIMETABLES FOR PASSENGER AND FREIGHT TRAINS IN INTERNATIONAL TRAFFIC Timetables for international passenger and freight trains are developed and coordinated annually for European railways and Railways of OSJD membercountries. This work is carried out within the framework of cooperation with the International Organization Forum Train Europe (FTE).

COORDINATION OF TRANSPORT VOLUMES AND CONDITIONS FOR GOODS TRANSPORTATION IN INTERNATIONAL TRAFFIC The railways of Vietnam, Kazakhstan, China, DPRK, Mongolia and Russia annually sum up transport volumes of foreign-trade goods. At OSJD meetings the railways coordinate transport volumes of export, import and transit goods for the following year with their distribution by quarters and by types of goods for each border crossing point. Furthermore, technical and organizational measures to provide the coordinated volumes are developed.

ORGANIZATION OF HEAVY-HAUL TRAFFIC The OSJD Seminar Organization of heavy-haul traffic was held on 7-8 April 2016 in Warsaw, Poland. In the Seminar took part over 50 representatives of transport administrations, railway companies, wagon production facilities, transport universities and transport research institutes from Azerbaijan, Hungary, Vietnam, Germany, Kazakhstan, DPRK, Latvia, Moldova, Mongolia, Poland, Russia, Slovakia, Uzbekistan, Ukraine, Czech republic, Sweden, International Union of Railways (UIC) and OSJD Committee. As a result, the participants to the Seminar elaborated Recommendations on organization of international heavy-haul traffic.

FINANCE AND ACCOUNTING Key activities Improvement of accountings for international freight and passenger transport Improvement and updating of the current Agreement on the Rules for accounting in international passenger and freight traffic and The Rules for accountings in international passenger and freight traffic with regard to current economic conditions for operation of OSJD railways Carrying out revision of the Agreement on the Rules for accountings with regard to conditions of liberalization of the railway services market and structural changes on OSJD railways Improvement of technology and reduction of payment terms Work on debt repayment and settlement of mutual payments between railways Cooperation with UIC on finance and accounting

FINANCE AND ACCOUNTING Legal framework for finance and accounting Parties to the Agreement on Правилах о расчетах в международном пассажирском и грузовом железнодорожном сообщении railways of Azerbaijan, Belarus, Bulgaria, Hungary, Vietnam, Georgia, Kazakhstan, China, DPRK, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Poland, Russian Federation, Romania, Slovakia, Tajikistan, Uzbekistan, Ukraine, Czech Republic, Estonia Mutual payments between OSJD railways: - For services provided under SMPS and SMGS documents; - carried out: а) based on the Agreement on accountings and Rules for accountings ; b) by concluding bilateral contractual agreements Twice a year (as of 31.01 and 31.07) summary tables on the state of debt (according to debtors and creditors) shall be prepared. The debt is recorded as Common debt (of all railways that carry out accounting according to the Rules for accounting ) and Debt of the parties to the Agreement on accountings At the meetings of the parties to the Agreement on accountings update and mutually agree on data. data The state of debt is analyzed and the measures taken by the railways to reduce it are considered

MECHANISM FOR SETTLEMENT OF LONG INDEBTEDNESS Compliance with the Rules on accountings... and Financial Discipline Control and analyses of indebtedness at the meetings of the OSJD Permanent Working Group on Finance and Accounting (PWGF) Holding of bilateral meetings and signing bilateral schedules for the settlement of indebtedness Meetings of the OSJD Commission on Accounting Settlement (CAS) - consideration of issues that are the subject of a dispute and introduction of recommended solutions

ORGANIZATION FOR CO-OPERATION OF RAILWAYS (OSJD) Railway transcontinental land bridge between Asia and Europe!