Russia’s Belkomur Arctic Railway Project: Hope, Illusion or Necessity?

At the fifth annual gathering of the International Arctic Forum, hosted by St. Petersburg, Russia, on April 9–10, 2019, participants voiced two diametrically opposing opinions regarding the so-called Belkomur (Arkhangelsk–Syktyvkar–Kudymakar–Perm) strategic railway project in the Russian High North. Yury Trutnev, a deputy prime minister of Russia and the presidential envoy to the Far Eastern Federal District, stated, “I became familiar with this project 15 years ago as governor of the Perm Region”; but he declared that he has yet to see any financial figures confirming the proposed railway’s profitability. If such evidence were to materialize, he would be glad to render full support for the initiative (TASS, April 10). In contrast, Vladimir Shchelokov, the director of the JSC Interregional Company Belkomur, called the project a potential “breakthrough” and assured that, by 2035, the planned railroad would be capable of transmitting 20.8 million tons of cargo annually (oil products, natural gas liquids, timber and coal). This would result, finally, in the creation of a unified transportation system in Russia’s northern territories. He specifically maintained that Belkomur should not be seen in isolation, but as an integral part of three other strategic projects—the Northern Latitudinal Railway (NLR), a deep-water port in Arkhangelsk, and Murmansk’s transportation hub (Rossyiskaya Gazeta, April 10).

Belkomur is a 720-mile (1,160-kilometer), north-south strategic railroad project designed to link Perm, in the Ural Mountains, with the Arctic port city of Arkhangelsk. This idea is by no means new: first entertained in 1912, concrete actions were undertaken between 1947 and 1954 and, after a significant pause, received new impetus in 1995, when the project obtained its current name. In 1998, construction began near Komi. And in 2008, the project was included in Russia`s Transportation Strategy Until 2030. However, financial difficulties halted the project, despite its designation as a “project of […] all-Russian importance.” In 2011, Belkomur was included in the Strategy for the Development of the Northwestern Federal District; this, however, brought no new developments (Belkomur.com, accessed July 15). The long-anticipated revival of the Belkomur railroad ensued on September 19, 2017, when President Vladimir Putin and Arkhangelsk Oblast Governor Igor Orlov defined the project (in conjunction with the deep-water port in Arkhangelsk city) as being of “instrumental importance for socio-economic development of the [Arkhangelsk] region” (Dvinanews.ru, September 19, 2017).

Importantly, Federation Council (upper chamber of the Russian parliament) Chairperson Valentina Matviyenko underscored another promised geostrategic feature of the Belkomur railway, stating that “this project will allow to not only accelerate the development of Russia’s High North and the Ural region but also to form an international transportation corridor in the direction of China” (Parlamentskaya Gazeta, May 24, 2017). In terms of local economic development, Belkomur has the potential to jumpstart 40 large-scale industrial projects (in various sectors of the economy), create 45,000 new jobs, boost regional GDP by 5.1 percent. Belkomur is also expected to become a factor in Russia’s foreign policy by providing Chinese goods and Kazakhstani and Mongolian coal the shortest land-based route to European markets (Railways.by, March 28, 2017).

Based on 2017 analysis of the economic benefits of the Belkomur railway (TASS, May 25, 2017), Arkhangelsk Oblast could process an additional four million cubic meters of timber yearly as well as increase local production of bauxites (the North Onezhsky mine), zinc and lead (the Pavlovskoye mine), building materials and diamonds (the Lomonosov and the Grib mines). The Perm region would arguably see minimal additional profits, although it would potentially boost exports of agricultural fertilizer and timber. Komi Republic could profit from greater exploration of timber resources (an additional 5 million cubic meters annually), bauxites (the Timan Ridge), titanium (the Yaregskoye mine), hydrocarbons, polymetallic nodules and chromite.

Despite these potentially lucrative prospects, several factors cast serious doubts on the likelihood of the project ultimately being implemented. The first major issue is the shortage of financial means and visible lack of interest from the side of (primarily) domestic investors. At different times, the project attracted the attention of such large players as Uralkali (URKA), Yarega Ruda and Solikamskbumprom; yet none of them was in the end willing to finance the project. A seeming breakthrough—serious interest from the Chinese Poly Group Holding Co. Ltd and willingness to invest $5.5 billion (sufficient to complete the project)—also did not yield any practical results. Some sources have pointed to Russia’s uneasiness with the prospect of fully embracing Chinese investors. As noted by the director of the information and analytical company Gekon, Mikhail Dmitriyev, one of the primary problems with the Chinese is that “they always demand full participation in a project: from investing and crediting to equipment delivery, participation in transportation and receiving of guaranteed profits” (Ritmeurasia.org, June 25, 2018).

The second major obstacle is indirectly related to the project, yet is by no means any less daunting. Arguably, the key segment of the Belkomur railroad—the Solikamsk–Syktyvkar–Arkhangelsk corridor—is virtually useless without necessary infrastructure in Arkhangelsk—namely, a functioning deep water port (Atpu.ru, accessed July 15, 2019). This, however, is said to be quite costly and might require at least eight years to start yielding profits. Moreover, some natural geographic particularities of the region—the constantly changing estuary of the Northern Dvina River, for one—is seen as yet another issue that might derail the implementation and ultimate success of the project (E-news.su, June 25, 2018).

Even so, Russia may be forced to try to undertake the completion of Belkomur anyway. This is because the Kremlin’s growing reliance on its icebreaker fleet in the Arctic region is, and will remain, effective only to a limited extent (see EDM, June 12, 2019). As argued by Russian experts, without necessary land-based backup in the form of a steady system of railways criss-crossing the High North, the much-promoted Northern Sea Route (Sevmorput) will preserve Russia’s “economic-geographical and military-political vulnerabilities… that is why it is crucial to underscore the strategic importance of the ‘Arctic Transsib’ [the Belkomur], which must be created… the absence thereof is weakening not only the Sevmorput, but the whole shipbuilding infrastructure on the Asian coast… weakening our state’s security and our geopolitical positions, and not merely in the Arctic region” (Vpk-news.ru, May 14, 2018).