EAEU creates the Integrated Transport And Logistics Company.

EAEU creates the Integrated Transport And Logistics Company.

On the 29th of May the presidents of Russia, Belorussia and Kazakhstan signed an agreement in Astana on the establishment of the Eurasian Economic Union. On the same day, the leaders made other important decisions in the field of economics, including approving the project for Joint Transport and Logistics Company — JTLC (ОТЛК).

This company was established in accordance with the development strategy of the Common Economic Space and the Customs Union for the period of 2014-2015.

The new company is needed to strengthen the transportation potential of the aforementioned international economic organizations. Memorandum on the establishment of JTLC was signed in June last year in St. Petersburg. Treaty on Principles Governing the Activities of The Established Company was signed in October during the railway business forum held in Minsk. As soon as November, the schedule for the new venture was approved.

During the negotiations, it was decided that the Russian Railways (RZD) brings 100% minus 1 share of "Russian Railways Logistics" and 50% plus 2 shares of "TransContainer" to the authorized capital of the new company. At the same time, KZD and BZD will not provide any of the securities, but instead offer cash contributions amounting to $1 million from each of the companies.

As conceived by the initiators of the project, it should be not only competitive, but also profitable. JTLC has to ensure the transit of cargo from China to Europe by rail. The Company intends to take a 60% market share of container traffic in the Sino-European direction and seeks to control 7% of trade between China and Europe. It is expected that by 2021 the volume of transported goods involving JTLC will reach 1.1 million containers.

Information provided by www.aup.ru