The Russians and Chinese are tag-teaming the modernization of high speed transit in Eurasia, one they hope will link Berlin to Beijing. State-owned Russian Railways will be the beneficiary, which is good for bond holders, as the China Railway Group has $6 billion pledged and an undisclosed German firm waiting in the wings with a reported 2 billion euros.
The money is going primarily to fund a new Moscow to Kazan line, the main city of the Tartarstan state in Russia.
“We have a proposal from our German colleagues on signing a similar memorandum on cooperation, where they make commitments on financing of up to 2 billion euros in the project on various conditions,” Vice President of Russian Railways Aleksandr Misharin told journalists on Saturday.
Russian Railways says the new line would be extended to connect to the already existing Moscow to Beijing line, reducing the duration of a rail journey between Moscow and China’s capital to 48 hours. This is wishful thinking based on the current technology. The trip from Moscow to China on board a Russian Railways train is 127 hours.
But, with China money and perhaps some Russian and German engineering, a new high speed line will cut that travel time by more than 75%.
The cost of the new 700 kilometer Moscow-Kazan rail line is estimated to be $21.4 billion, including rail and locomotives. The company said the train will be designed to travel at speeds of up to 250 miles per hour. The fastest train in the U.S., Amtrak’s Acela service, has a maximum cruising speed of 150 miles per hour.
Under the new Kazan line, travel from Moscow would take three and half hours instead of 14 currently.
Russian Railways is the third largest rail transport carrier in the world and is valued at around $116 billion. Only the U.S. and China are bigger. It has 53,127 miles of rail and has 12 different transnational routes, connecting parts of Western Europe to Moscow and connecting Moscow to Beijing and points further east.