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In June this year, the head of China’s high-speed rail innovation program Jia Limin announced the development of a next-generation bullet train that will reach 400km/h. The new class of high-speed trains, to be developed between now and 2020, would be available for export, Limin told China Daily.

Later that month their destination was announced: the new trains will run on Russia’s 770km Moscow-Kazan route, connecting seven Russian districts.

The project was first proposed in 2009 by Alexander Sergeevich Misharin, former governor of Sverdlovsk Oblast region, as an “instrument of innovation [and] development of the Russian economy”. In 2013, President Vladimir Putin gave it the green light and soon after China expressed interest in becoming involved with the project.

Apart from the financial advantage of landing a major infrastructure deal, China has high stakes in the Moscow-Kazan line, as a stepping stone to a greater plan. The route is hoped to become part of a $100bn high-speed railway between Moscow and Beijing, as well as an addition to the New Silk Road project, which will connect China to markets in Europe and the Middle East.

Russia prepares to welcome next-gen trains

Through the planned Moscow-Kazan line, Russia will become host to one of the most technologically advanced rail systems in the world.

Under an agreement signed on 27 June by Russian Railways, Russian investment company Sinara Group, China Railway, and the Chinese state-owned rolling stock manufacturer CRRC, a batch of 100 high-speed trainsets capable of reaching 400km/h are to be produced at a plant in Russia. CRRC will be responsible for the design, planning, quality control and technical support of the rolling stock.

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By GlobalData

This will bring Russia’s trains, at least along this route, up to a speed comparable with the fastest in the world. At present, China is already capable of designing and manufacturing 500 km/h trains, but due to safety and running cost restrictions, these are currently only being used for testing purposes.

“Russia will become host to one of the most technologically advanced rail systems in the world.”

The route will connect seven districts via 15 stops, including Vladimir, Nizhny Novgorod, Cheboksary and Kazan, and it will drastically cut the current journey time between Moscow and Kazan from 12 hours, to just three and a half hours.

One critical feature of the new trains is that they will be able to automatically adjust to fit various track gauges. Russia’s network requires trains to run on a 1,520mm track, compared with the narrower 1,435mm tracks used in Europe and China.

“The train…will have wheels that can be adjusted to fit various gauges on other countries’ tracks, compared with trains now that need to have their wheels changed before entering foreign systems,” Limin told China Daily.

Rail financing and deadline remain uncertain

Total price estimations have so far exceed $15bn, out of which China has already agreed to provide a $6bn loan covering the railway’s construction, geological research and improvement of the economic structure, according to Russian Government-controlled news agency Sputnik.

In September, the agency reported BRICS New Development Bank (NDB) vice-president Zhu Xian as saying that Russian Railways had reached out to NDB regarding potential financing of the project.

“We will consider it, but now it is too early to say whether we will provide financing because we haven’t received detailed information yet,” Xian said, and highlighted that a project of this scale will require alternative sources of financing.

“The rail project is another indication of a strong relationship between the two economies.”

“For such a huge project I think that you need financiers, not a one can do all, you need different parties to do that. And also you need a sort of agreement from the government, both from Russian and Chinese Governments, on what concession package you can put to the financiers and investors to consider.”

Although a timeframe for its completion hasn’t yet been released, Rustam Minnikhanov, President of the Republic of Tatarstan said that local authorities are extremely interested in implementing the project and commissioning it before the start of the FIFA World Cup in 2018.

“The high-speed rail line in this case will become an important component in providing transportation support for the World Cup, as it will link three cities that are holding matches – Moscow, Nizhny Novgorod and Kazan,” Minnikhanov said. “We are doing everything to ensure that this project is implemented.”

However, considering the scale of the project, and the fact that the first fleet of trains will be manufactured at a Russian plant yet to be build, a 2018 deadline looks implausible.

A strengthened Sino-Russian relationship

After Russia’s fallout with the west over Crimea and the stringent economic sanctions that followed, Putin turned to China for support and cooperation, signing infrastructure, energy and financial agreements worth hundreds of billions.

The current rail project is just another indication of an increasingly strong relationship between the two economies and their respective leaders – a relationship which has so far proved beneficial to both parties.

On the one hand, Russia is trying to fully enter the high-speed era, leaving behind an ageing Soviet rail network. Meanwhile, China has been on the losing side of a few similar rail contracts after deals with the US, Mexico and Taiwan fell through.

Now, after their support in the early stages of this project, it wouldn’t be a surprise to see this Sino-Russian rail deal flourish. According to Russian Railways president Vladimir Yakunin, Chinese rail developers are more likely to land the construction tender worth $12bn.

“Of course the one who is participating in the planning has an advantage. This is obvious,” Yakunin said.

The project is a long-term strategic plan of great economic and political value for both powers.

The next move would be to extend the Moscow-Kazan line to create a 7,000km high-speed link between Moscow and Beijing. Later down the line, it is hoped that the network will also be integrated with the Silk Road Economic Belt, a continent-spanning network championed by Xi Jinping to strengthen ties and connectivity between China and Eurasia.

So far, the project has seen strong commitment from both countries, despite Russia’s battle in recent months with a recession brought on by low oil prices and economic sanctions.

Hong Kong-based journalist and author Mark O’Neill flagged up additional barriers, pointing to Venezuela, which abandoned its high-speed plans due to the fall in oil prices.

“[M]any are sceptical that the Moscow-Kazan line will ever be completed,” O’Neill wrote. “If oil prices remain low, Russia cannot afford it – and China is not going to pay for it.”

Latest economic reports are however encouraging. After a period of uncertainty, China’s growth is finally stabilising, according to government data, while OECD forecasts Russia’s growth to turn positive in 2017. If the predictions are correct, the Moscow-Kazan line could become a reality in the not-so-distant future.