THE USSR'S BAIKAL-AMUR MAINLINE RAILROAD: DRIVING THE GOLDEN SPIKE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00313R000300090007-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 22, 2016
• Document Release Date: June 9, 2009
• Sequence Number: 7
• Publication Date: November 1, 1984
• Content Type: REPORT

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Directorate of Secret
Intelligence
The USSR's Baikal-Amur
Mainline Railroad:
Driving the Golden Spike
NGA Review
Complete
Secret
SOV 84-10193
IA 84-10083
November 1984
Copy 4 6 7
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Directorate of Secret
Intelligence
The USSR's Baikal-Amur
Mainline Railroad:
Driving the Golden Spike
An Intelligence Assessment
This paper was prepared b
Soviet Analysis, and
Contributions were made by
of SOYA. Background
information was provided by the Office of Global
Issues and the Office of East Asian Analysis.
Comments and queries are welcome and may be
addressed to the Chief, Soviet Economy Division,
SOVA
Secret
SOV 84-10193
IA 84-10083
November 1984
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The USSR's Baikal-Amur
Mainline Railroad:
Driving the Golden Spike
Key Judgments The Soviets claim that they completed tracklaying on the Baikal-Amur
Information available Mainline (BAM) on 29 September 1984. Even though the Soviets have
as of 30 September 1984 completed a track along the entire 4,333-kilometer line, the BAM is far
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from finished. Indeed, Soviet statements suggest that, 25X1
if passengers boarded a train to traverse the BAM now, they would have a
thrilling ride: scaling steep slopes to bypass unfinished tunnels, negotiating
tight S-curves, and guessing the whereabouts of some 1,400 construction
defects found by inspectors in 1983 25X1
The completion of tracklaying this year probably was a symbolic gesture to
end the years of campaigning on a triumphant note. With engineering
problems pushing full completion of the line well beyond the original
deadline (1983) and even the revised deadline (1985), the Kremlin struck a
face-saving compromise-complete "something" ahead of schedule and
then resolve the remaining problems removed from the spotlight of
international attention. To add luster to the occasion, the Central Commit-
tee in a decree last March scheduled the completion of tracklaying for 7
November 1984, the anniversary of the October Revolution. Full operation
of the railroad was delayed, however, until 1987 or 1988.
But the strategy appears to have backfired. The push to accelerate
tracklaying resulted in numerous instances of shoddy workmanship and
dangerous shortcuts-probably including a major tunnel collapse earlier
this year. These added problems may not have been brought to Moscow's
attention until June 1984 when the Kremlin's transportation overseer,
Geydar Aliyev, chaired a meeting to discuss BAM's problems. During the
summer, completion was rescheduled from the date of national celebration
to an earlier, less visible date.
The builders of the BAM may well miss the new target for full operation in
1987-88. Finishing the remaining tunnels and bridges and correcting the
accumulated mistakes resulting from accelerated construction are only
first steps. Electrified segments of the line must be fully wired, and a range
of services-depots for passengers and the facilities for repair and mainte-
nance of rolling stock, for example-must be in place and staffed. Soviet
claims indicate that the estimated 4 billion rubles already spent on
constructing the BAM since 1974 are only the beginning; another 2-4
billion rubles will be needed to bring it into full operation. If these figures
are accurate, the BAM must continue to command at least its current
budget to meet the new deadline-a questionable prospect if pressures have
been reduced by its nominal completion.
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The prospects for extracting a payoff from the railroad through develop-
ment of the vast resources along the BAM corridor look dim until the
1990s. Nevertheless, Moscow has talked about pushing forward on a few
selected resource-development projects. Timber in the Far East and iron
ore, coking coal, and phosphate deposits in South Yakutiya are the most
likely targets. Moscow also has shown some interest in developing high-
quality copper and asbestos deposits for export. Although some of these
raw materials are in short supply in the Soviet industrial heartland-
coking coal, for example-Moscow has better options for resolving the
shortages than bearing the large development and transport costs of
tapping the distant reserves in the BAM zone
The Soviets have hoped since Stalin's time to lure foreign capital into this
resource-rich area to help cover the enormous development costs, estimated
at between 15 billion and 25 billion rubles. The BAM, part of the necessary
infrastructure, is reaching completion at a poor time for attracting foreign
capital. Mineral and metals markets are not as robust as in 1974, when
construction of the BAM resumed. For some markets-like copper-the
end of the current slump is not in sight. Japan, the Soviets' most likely
partner, is expected to reject Moscow's overtures for help in Siberian
development during their joint trade talks in the fall of 1984.
The Soviets will take only small steps, primarily to build the infrastructure
to support resource development later and to satisfy secondary objectives.
When fully operational, the BAM will be an important alternative to the
Trans-Siberian Railway (Trans-Sib), which is already pushed to its limit
for moving commodities, as well as men and materiel for the military, to
the Soviet Far East. Even before the BAM can support its full capacity, it
could ease the strain on the Trans-Sib by providing an alternative route for
returning container cars to Far Eastern ports for the transshipment of
international freight from the Pacific to Europe-the Soviets' land-bridge
route that earns $300 million a year in foreign exchange.
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Key Judgments
Picking Up the Pace 1
Tunneling Problems 4
What Happened to the Vitim Bridge? 6
Siberian Resource Development-No Quick Payoff 6
The Likely Soviet Agenda 8
Komsomol'sk-Upper Lena Area 8
Foreign Assistance 18
Methodology for Deriving BAM Construction and Installation Costs 21
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The USSR's Baikal-Amur
Mainline Railroad:
Driving the Golden Spike
The Soviets claim that they completed tracklaying on
the Baikal-Amur Mainline (BAM) on 29 September
1984. Strategic factors were important in the decision
to build the BAM, but by far the most important
reasons were economic. This multibillion dollar proj-
ect, whose construction spans nearly six decades,
represents a world-class engineering challenge. It is
not only long-about the length of the first transcon-
tinental railroad in the United States (see figure 2) -
but also traverses the hostile environment and diffi-
cult terrain between Tayshet in East Siberia and
Sovetskaya Gavan' on the Pacific coast
This paper assesses the line's status, the decisions
about Siberian resource developments facing the Sovi-
ets, and the outlook for obtaining a payoff from this
expensive investment project
In March 1984 the Soviet Central Committee issued
a decree calling for the completion of tracklaying on
the BAM by 7 November 1984, the 67th anniversary
of the October Revolution. The Soviets were to cele-
brate the completion of tracklaying on that date near
Kuanda, a major station on the BAM (see figure 3).
During the summer, however, the Soviets accelerated
the pace of tracklaying and claimed completion of the
line on 29 September 1984, a date with no known
prestige value, at Balbukhta, a minor station on the
BAM.
Evidence-gathered from open-source literature
as been accumulating that the BAM as it
now exists falls far short of being the line originally
planned by Moscow. Indeed, other Soviet reports state
that full operation will not be possible until later in
the 1980s. We believe that the Soviets decided to
accelerate tracklaying to end the BAM publicity on a
triumphant note and thereafter to shift the spotlight
away from this problem-riddled project. But accelera-
tion itself caused additional difficulties and encour-
aged shoddy construction, the scope of which even the
Kremlin may not have been aware of until early last
summer.
Picking Up the Pace
We believe that the decision to speed up tracklaying
was made before fall 1982 and probably as early as
1981. We base this judgment on the significant
change in the pace of construction
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claims of a sharp increase in spending for the BAM in
1982. 25X1
According to Soviet reports in December 1981, the
volume of construction work on the BAM was to
increase by 90 million rubles in 1982. By our accounts
of BAM spending, this would have amounted to an
18-percent increase (see table 1) and probably coin-
cides with the initial decision to complete tracklaying
by 1984.
This increase in spending probably was not imple-
mented until 1983, however.
the pace of tracklaying on the BAM significantly
increased during 1983 (see table 2). Builders laid
about 25 km of track per month between late 1979
and early 1983. Completion of tracklaying under this
schedule would have occurred by late 1985 or early
1986. From February to October 1983, the rate of
construction increased by 40 percent to at least 35 km
per month.' Construction on the western segment
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cceleration on the eastern segment began 25X1
in late 1 The construction rate for the segment extending from
Tynda eastward rose to 9 kilometers per month and for the segment 2 5X 1
from Urgal westward to 10.9 kilometers per month between 25X1
November 1982 and February 1983. 25X1
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Building the BAM
The building of a railroad north of the Trans-
Siberian Railroad is the realization of an old dream.
The route destined to become the BAM was one of
two included in a preliminary design worked out by
the Czarist Railroad Ministry between 1911 and
1914, but its implementation was prevented by World
War I. Further surveys were undertaken in the early
1930s, and- initial construction began before World
War II. Construction occurred sporadically following
the war, and 1,188 kilometers (km) of the BAM's
total length of 4,333 km (2,692 miles) were completed
by the early 1950s. The project then went into limbo
until 1967, when, without fanfare, survey and design
began anew on the final 3,145 km. The Trans-
Siberian Railroad at 6,581 km is much longer than
the BAM. Even from its junction with the BAM at
Tayshet to the Pacific Coast, it is some 440 km
Official recognition for the BAM's revitalization
came in March 1974 when Brezhnev proclaimed its
construction a major project of the 10th Five-Year
Plan (1976-80). Completion was set for 1983. Howev-
er, slower-than-expected progress and a tunnel disas-
ter in 1979 contributed to rescheduling the date to
1985. Finally, with tunneling problems still unre-
solved, the Soviets struck a compromise and called
for the completion of tracklaying in 1984 and the full
opening of the BAM in 1987 or 1988.
alone jumped by nearly 50 percent to 21.4 km per
month. This faster pace was continued through at
least August 1984 on the western segments, and-if
maintained-would have allowed completion of track-
laying by the November deadline. The Soviets an-
nounced the completion of tracklaying on the eastern
segment in April 1984,
The claimed completion of the line on 29 September,
more than a month ahead of schedule, suggests that a
second decision was made last summer to further
accelerate the pace of tracklaying
70 km of track remained to be
laid on the BAM's western segment. To close this gap
The post-1974 BAM project consists of two separate
lines, the Baikal-Amur Mainline and the Little BAM
(see figure 3). The Baikal-Amur Mainline stretches
from its western terminus at Tayshet, a stop on the
Trans-Siberian Railroad, eastward to the Pacific
port of Sovetskaya Gavan'. The sections completed
by the 1950s were on both ends of the line-720 km
between Tayshet and Ust -Kut (Lena station) and 468
km between Komsomol'sk and the Pacific. In addi-
tion, the 168-km line between Komsomol'sk and
Berezovyy was already in operation for timber haul-
ing and required only reconstruction.
The Little BAM is much shorter. It consists of a
north-south line running nearly 400 km from Ba-
movskaya, a small station on the Trans-Siberian
Railroad, north through Tynda to Berkakit in Yaku-
tiya. Construction of the southern section between
Bamovskaya and Tynda actually began in 1972,
before Brezhnev's 1974 announcement of the BAM
project. The little BAM line was completed through
Berkakit in 1978. The entire BAM system, therefore,
consists of over 4,700 km of track, of which some
3,500 km remained to be constructed at the start of
the post-1974 phase. When reference is made in the
text to BAM investment, manpower, and so on, the
little BAM is included.
by late September, tracklaying rates on that segment
must have risen to about 35 km per month-50
percent higher than former peak rates achieved in
that segment. This higher rate is equal to the highest
observed rate for total BAM construction when four
tracklayers were operating simultaneously-only two
tracklayers are in operation on the western segment.
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Figure 2
The Baikal-Amur Mainline and the First
Transcontinental Railroad in the United States
The United States Government has not recognized
the incorporation of Estonia, Latvia, end Lithuania
the Soviet Union. Other boundary representation
is not neceeaertly authoritative..
Soviet Union
Black-
L\ Sea
Caspian
Sea
Both decisions to increase the pace of construction
almost certainly were made by the Kremlin. The
BAM is a nationally prestigious project, commands a
work force of more than 100,000 (including military
construction troops), and has a construction budget of
about half a billion rubles per year
Moscow has not revealed the reason behind the push
to complete tracklaying, but we think it originally was
a face-saving measure for this highly visible project,
whose problems cannot be overcome for many years.
Costs-both in political terms and in rubles to correct
added defects-might well escalate if construction
were kept under a national spotlight. The Kremlin
could then spread the costs of both completing the
BAM and redressing mistakes over a longer time
frame.
The decision to accelerate tracklaying further proba-
bly was made after the BAM's problems were dis-
cussed at a June 1984 conference in Tynda chaired by
Geydar Aliyev, the Kremlin's transport overseer. Be-
cause the new schedule moved BAM completion from
a celebrated date to one with no known prestige value,
we speculate that during the June conference Aliyev,
and hence the Kremlin, was made aware of the scope
of the BAM's construction deficiencies. Some of these
deficiencies resulted directly from the Kremlin's pres-
sure to complete tracklaying in 1984.
Eeke Clty Omaha ~Chfcao~
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Environmental Constraints on BAM
Construction
Construction of a railroad system of the BAM's
length would be a major challenge under the best
conditions. The problems of building the BAM have
been magnified because it passes through a remote,
geologically complex, and extremely inhospitable re-
gion. Most of the route traverses mountainous terri-
tory, and seven main north-south ranges lie at right
angles to the line's generally east-west alignment,
providing few easy passages. There are nine major
rivers requiring large bridges, as well as numerous
smaller stream crossings. Over 25 km of tunnels are
required; the longest, the Severo-Muyskiy Tunnel, is
over 15 km. In the less mountainous eastern section,
the route passes through extensive areas of bog. Even
more forbidding than the topographic obstacles are
the environmental constraints. The harsh, cold cli-
mate, where winter temperatures drop to -50 de-
grees Celsius in some places, heavily strains both men
and machinery and greatly limits productivity. More
than 50 percent of the route crosses permafrost,
which adds substantially to the engineering and
construction work required to ensure stability of the
roadbed and track alignment. Earthquakes also oc-
cur frequently in about 1,000 km of the western
BAM's zone.
Tunneling Problems
The Soviets' biggest engineering headache seems to
be the construction of the seven major tunnels be-
tween Tayshet and Chara. The tunnels are challenges,
in some cases requiring tunnelers to bore through
permafrost or compensate for seismically active geolo-
gy. At least two serious cave-ins have occurred in
boring the tunnels. The disaster at the Severo-
Muyskiy tunnel must have been a blow to the entire
project and a turning point that led to the decision to
delay the BAM's full operation. Indeed, the Soviets
now have openly linked the tunnel's delayed comple-
tion with the postponement of full operation until
1988. However, they have not reported the loss of life
or machinery in the disaster. As the most challenging
of the tunnels, Severo-Muyskiy must have required
many skilled workers and machines; some of these
were surely lost. The Soviets reported in June 1984
that a second serious cave-in had occurred-at the
Kodar tunnel. Although accounts in the Soviet press
have varied, it appears that, with the accelerated pace
of construction, tunneling ran dangerously ahead of
arch reinforcement, and the permafrost finally gave
way under the heat of the tunneling operations.
The Soviets claims I that
railroad bypasses have been built around six of the
seven tunnels-all but Kodar
Kodar tunnel was nearing completion
These bypasses are quick fixes that will limit the
capacity of trains negotiating the BAM's western
segment. The bypass around the 15-km Severo-
Muyskiy tunnel for example, climbs a
3- to 4-percent grade.' The Soviets probably will press
powerful diesel-electric locomotives into service along
it. Nevertheless, the difference between a 1- and a
3-percent grade will reduce their carrying capacity by
about two-thirds. In addition, sharp curves will reduce
train speeds, limiting the capacity of the bypass.
Defective Work
The drive toward the BAM's early completion has
resulted in numerous other examples of shoddy work,
whose resolution will tie up construction crews long
after the line is nominally complete. The chief con-
struction inspector of the BAM's board of directors, in
an article in the March 1984 Gudok, the Soviet .
railroad newspaper, reported that inspection services
"found about 1,400 instances of defective work on the
BAM during the past year"-presumably 1983. He
attributes this to the fact that "builders, striving for a
fast work pace, do not always attach importance to
the dependability and durability of the facilities they
are putting up." He notes that "inspectors' numerous
reminders and warnings are greeted with silence and
[the builders] take shortcuts that haven't been cleared
with anyone."
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Figure 3
USSR: The Baikal-Amur Mainline
ti
P,kutsk
kal NizhneangKsTc Chair
gel? ;~ i
~ btu yr'.a
cake''w~ Chit
Lake Baikal.
Tunnels (4) l
OkhotskKurit Islands
(administered by
Soviet Union)
e;jj r Boundary representation is
not necessarily authoritative.
The inspector goes on to cite examples of poor
roadbed construction, tight curve radii and steep
inclines, violations of installation procedures in bridge
construction, and the failure to install devices neces-
sary for maintaining stable frozen ground tempera-
tures in bridge foundations and other manmade struc-
tures. Although we cannot verify all of the chief
inspector's claims many instances
where workers have taken obvious s ortcuts to com-
. plete the line on time
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Table 1
USSR: Estimated Construction and
Installation Costs for the
Baikal-Amur Mainline a
Million Million
Rubles Rubles
1977 335 1982 510
1978 390 1983 600
a Costs are derived from Soviet claims, which are believed to be in
constant 1973 rubles. Costs exclude the work done on the 1,188 km
of the BAM completed by the early 1950s. See appendix for the
method used in determining costs.
What Happened to the Vitim Bridge?
The Soviets have been unusually candid-even if
somewhat late-in their reports of tunneling prob-
lems, and a few reports have surfaced on the defects
that resulted from the haste to complete the BAM.
But Moscow's candor has not been complete. Other
major structures have slipped well behind schedule.
The example of the Vitim bridge arouses suspicion as
to how complete the BAM is.
On 2 July 1984 TASS reported: "The last major
waterway (the Vitim river) has been overcome. A
tracklayer has crossed over a 500-meter bridge and is
headin toward the foothills of the Kodar mountain
range.' a
tracklayer indeed was present east of the Vitim river.
The tracklayer, however, apparently crossed the river
over temporary track laid on an existing highway
bridge
we suspect the Vitim bridge is not the
only e of phantom construction.
Completion of the BAM is clearly still distant. Ac-
cording to the railroad's head, more than one-third of
the capital investments intended for the project have
yet to be made. The head of construction, perhaps
attempting to retain his work force, claims that only
one-half of the investments have been "assimilated."
Both estimates probably exclude the costs of redress-
ing shoddy construction, a topic that the head of
construction sidestepped.
Resources must now be devoted to developing the
BAM's infrastructure-stations, repair shops and
equipment, necessary support plants in the construc-
tion industries, and the improved living quarters and
consumer services required to attract and hold the
labor force. Lack of an adequate infrastructure, par-
ticularly in construction materials industries, proba-
bly has contributed to the delays in finishing major
structures along the BAM.
Siberian Resource Development-No Quick Payoff
While the infrastructure is being built, Soviet plan-
ners will probably try to redirect attention to the
payoffs resulting from completion.
sluggish through the 1980s.
The Soviets declare that a draft program for economic
development of the BAM zone up to the year 2000 is
nearing completion. Details for individual years of the
12th Five-Year Plan (1986-90) will be included. The
plan notwithstanding, the outlook for significant prog-
ress on development of resources (see figure 8) looks
poor until at least the 1990s. The unfinished BAM
itself will continue to limit access to resources west of
Tynda through much of the 1980s. In addition, the
prospects for attracting additional domestic and for-
eign capital to the zone-at least during the 1980s-
are poor. World markets are soft for most of the more
accessible resources in the central and eastern por-
tions of the BAM corridor and are expected to remain
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Table 2
USSR: BAM Construction Rates a
February-October 1983
October 1983-August 1984
Nizhneangarsk'
Eastward
10.0
11.9
a Each construction rate ~s calculated aq the di n the
points of new tracklayin divided
Tynda Tynda Urgal
Westward Eastward Westward
11.4
11.9
4.8 c 8.7
NAd NA d
point where new construction was under way was not observed.
d he Soviets report
that e segments were compete m April 1984.
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According to Soviet claims, the development of the
resource corridor of 1.5 million square kilometers
surrounding the BAM-running 150 to 200 km on
each side of the rail line-will require three times as
much investment as was allocated for construction of
the BAM itself, or upward of 15-25 billion rubles.'
The Soviets will probably not try to shoulder the
entire capital burden of resource development on any
substantial scale. Growth in domestic investment
through 1990 appears to be earmarked predominantly
for the energy sector and the agro-industrial complex.4
Projects along the BAM zone do not figure heavily in
these programs. Although some of the raw materials
available along the BAM corridor are in short supply
in the industrial heartland-coking coal, for exam-
ple-we doubt that Moscow plans to underwrite the
' According to Soviet claims, spending on construction and installa-
tion work on the BAM through 1983 totaled about 4 billion rubles.
Claims that from one-third to one-half of the work remains to be
done place total BAM construction costs at 6-8 billion rubles. At a
cost triple that for constructing the BAM, resource development
would run to 18-24 billion rubles. We use the more general range of
15-25 billion rubles. This is equivalent to 23-36 percent of total
transportation and industrial investment in 1982.
high development costs or bear the large transport
costs associated with BAM resources to resolve these
current shortages. Moscow probably has lower cost
strategies to relieve these problems. In the case of
coking coal, for example, Moscow has not yet fully
implemented its plans to significantly expand mining
of higher quality coking coal deposits at.Kuznetsk,
some 2,000 km closer to major consumers. Comple-
tion of tracklaying along the BAM may, however, free
some general construction funds for other uses. Some
of this excess will surely go to infrastructure develop-
ment, which was placed on the back burner to acceler-
ate completion of tracklaying.
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The Disaster at Severo-Muyskiy Tunnel-
A Soviet Account
The Soviets provided the following accounts of the
1979 accident at the Severo-Muyskiy tunnel in a
1983 Pravda article more than three years after the
event:
Twelve thousand cubic meters of water, sand
and rock, under enormous pressure, surged into
the gallery in a matter of seconds. The column
of water that had been concealed in the moun-
tain, it was learned later, was 140 meters high.
The drilling unit, which weighed many tons, was
instantly hurled back dozens of meters, as if it
were a piece of fluff. The lights went out. Only
the lamps on the tunnelers' hard hats glimmered
faintly through the spray of water and the thick
fog rising from thermal springs. The hot roaring
mass rushed swiftly through the tunnel, sweep-
ing up everything in its path
The Likely Soviet Agenda
Budget permitting, the more likely candidates for
development or expansion in the near term are in the
central and eastern sections of the BAM-timber at
Komsomol'sk and perhaps the Upper Lena areas, and
coal, iron ore, and phosphates deposits in the South
Yakutiya region. Over the last year the Soviets have
resurrected the possibility of developing copper depos-
its in the Udokan area, and they have done some
preparatory work for developing a high-quality asbes-
tos deposit in the North Baikal Territorial Production
Complex. Most of the BAM's vast resources probably
are not intended to provide a significant boost to
domestic consumption for some time-perhaps not
until after the year 2000. Nevertheless, Moscow
would like to prepare the foundations now by sharing
some infrastructure and development costs with other
countries on a compensation basis. For most of the
projects under consideration now, the Soviets will look
to Japan as a financier, source of machinery and
equipment, and/or as a market for the raw materials.
Komsomol'sk-Upper Lena Area. The Soviets already
have begun timber operations along the BAM corri-
dor-generally in the Komsomol'sk area. According
to a Soviet study, Komsomol'sk is likely to be the only
profitable zone in the BAM service area through
1990.
Total supplies of logs provided within the BAM zone
currently amount to nearly 15 million cubic meters
(m') annually, about 15 percent of the country's total.
By 1990 we believe the Soviets could be in a position
to increase shipments of wood from this area to 30 to
35 million m', including 20 million from timber tracts
closest to the rail lines. Projections made by Soviet
officials indicate that over three-quarters of these
logging activities will be concentrated in the Upper
Lena and Komsomol'sk districts. About 80 percent of
timber production from the BAM zone for the fore-
seeable future is intended for export. If markets can
be found for this potential 24-28 million m', the
Soviets could earn more than $1 billion a year in
foreign exchange or the equivalent in machinery and
equipment for further Siberian development. The
remaining 20 percent-6-7 million m3-will probably
be used in local construction.
Japan will be the main export target, although small
amounts of wood will go to North Korea and China.'
It will be some time, though, before Japan's large
wood-processing capacity-idled by weak demand-
will need raw logs to meet higher production require-
ments. Japanese demand for wood has been weak
since the late 1970s, and the slump during the last two
quarters in the local economy suggests a continuation
of sluggish demand. Even when a recovery resumes,
the Soviets will be competing with the ASEAN
countries for growth of the Japanese market. Tokyo is
interested in the high-quality Angara pine from the
BAM region. The Japanese have been willing to pay a
premium for this lumber on world markets.'
' Despite weak demand and declines in the world price for logs, the
Soviets have earned the equivalent of $1 billion in foreign exchange
between 1980 and 1982 from log exports to Japan
6 Because the quality of Soviet processed products is poor, Moscow
sells raw timber to Japan, which in turn processes it for domestic
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Although Moscow has tried often to entice Tokyo into
joint development in Siberia and along the BAM, the
Japanese are likely to consent only to compensation
agreements. As has been its practice in the past,
Japan will export logging and wood-processing equip-
ment in return for its timber imports.
South Yakutiya. Aside from continuing to increase
timber operations, the Soviets' only well-developed
plan for resource development in the BAM zone is for
the South Yakutiya area. The Little BAM already
has been extended to the Neryungri/Chulman area to
support coal mining operations there. The Soviets
intend to use rail construction teams as they finish
their work on the BAM to extend the Little BAM
from its terminus in the Chulman area to Aldan some
200 km farther north. There they hope to exploit large
deposits of iron ore and phosphate. The resources of
the South Yakutiya area will be used both for region-
al development and for export. However, large-scale
exploitation will not begin until the 1990s.
The South Yakutiya coal deposits are estimated by
the Soviets at 40 billion metric tons. The Soviets
expect that the Neryungri deposit alone, which is
being developed under an existing agreement with
Japan, will produce 13 million tons of coal a year. The
Japanese granted the Soviets $540 million in credits
for equipment to develop Neryungri in return for 104
million tons of coal to be delivered over a 16-year
period. According to the terms of the trade protocol,
the Soviets will supply 84 million tons of coking coal
from South Yakutiya during the period 1983-99. The
Soviets have also agreed to send Japan 1 million tons
of coking coal per year from the Kuznetsk basin
during 1979-99 to speed up credit repayments. The
Japanese were to receive initial shipments of 3.2
million tons of coking coal from Neryungri in 1983,
and the volume was to increase to about 5.5 million
tons a year by 1985. But the Soviets missed this
deadline. So far, Neryungri is yielding mainly steam
coal from its upper strata for regional boiler use. F_
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Figure 8
Resource Areas Along the BAM
Mong J
Komsom7l?s 1h
omso oll sk
Sn~ W1
Okhots'kKunl Islands
(administered by
So et Un on)
1 of , c ss ly a rho ietrve,
.A Asbestos * Coal
CU Copper > Fishing
AU Gold Hydroelectric
Fe Iron ore ego Pulp/paper
p Phosphates 4 Timber
Sn Tin
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USSR: Main Resource Centers Along the BAM
Service Area
Development of the South Yakutia Territorial Pro-
duction Complex (TPK) will be based on high-quality
coal in the Chul'man area and iron ore at nearby
Aldan. In addition, the TPK has significant deposits
of mica, apatite, and gold. It will provide the starting
point for development of the Vilyuy gasfields
The Urgal Industrial Center will focus on develop-
ment of power, initially from the Bureya Dam but
later from other dams projected for the Bureya River
and its tributaries. These plants will supply electric-
ity to the eastern section of the BAM and to the Far
East economic region. The area also contains signifi-
cant deposits of coking coal. Urgal probably will
function as an important transshipment point.
The Zeya Industrial Center is also based on hydro-
electric power, in this case from the Zeya Dam. This
TPK probably will undergo extensive development,
including a buildu o timber and machine-building
industries
The Komsomol'sk Territorial Production Complex,
centered on the industrial city of Komsomol sk,
already exists and should increase in size and influ-
ence. It possesses a sizable industrial base, including
an iron and steel mill, machine-building enterprises,
and petrochemical plants, all of which are likely to
expand. The timber and downstream pulp and paper
industries and the tin-mining operations in the area
also are likely to develop.
The port in the Sovetskaya-Gavan' Industrial Center,
at the eastern end of the BAM, has the potential to
become a major transshipment point and storage
facility, and its fishing industry operations also prob-
ably will expand. Much of its success, however, will
depend on the course of Soviet-Japanese relations. F
The development of the Upper Lena Territorial Pro-
duction Complex depends largely on future hydro-
electric power development on the Lena and Kirenga
Rivers. The Soviets also plan major timber develop-
ment here.
The area around the North Baikal Territorial Pro-
duction Complex contains large deposits of many
minerals, including molybdenum, chromite, and as-
bestos. Development of a wood products industry will
be contingent upon the availability of inexpensive
hydroelectric power.
Development of the Udokan Industrial Center will be
based on the major copper deposits located there
The Tynda Industrial Center, the `capital of the
BAM, "probably will continue developing as a trans-
port center and machine-repair base
Note: The resources of the BAM zone are described
and analyzed by Victor Mote in Soviet Natural
Resources in the World Economy, ed. Robert G.
Jensen, Theodore Shabad, and Arthur W. Wright
(Chicago: University of Chicago Press, 1983).
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The Japanese, however, probably are not pressing the
Soviets to accelerate production. The recovery of
Japan's steel industry is not as strong as expected, and
the Japanese are trying to delay shipments and obtain
lower prices for coking coal from other suppliers.
Under these conditions, the schedule for coking coal
extraction at Neryungri may be further stretched out,
and the Soviets probably will delay development of
The Soviets have touted the project in the press
during 1984
additional Chulman deposits.
geological surveys place
iron ore reserves in the Aldan upland at 840 million to
1.5 billion metric tons. Soviet reports indicate that
annual production from the Aldan region will be 13-
17 million tons, of which as much as 5 million tons a
year could be exported to countries in the Pacific
Basin. But Soviet prospects for iron ore exports-
mainly to Japan-are limited unless the Japanese
steel industry sustains its recovery. More of the ore
probably would be used in Siberia itself. The Soviets
have long talked about constructing a fledgling steel
industry along the BAM zone to support regional
development. The proximity of Aldan ore and
Neryungri coking coal makes the Little BAM corri-
dor a likely location for such a complex. However, a
major policy decision would be required to redirect
already inadequate capital available for refurbishing
the main steelmaking plants in the western part of the
country to build a new steel plant in this area.
Meanwhile, the Soviets have estimated the size of the
Seligdar phos hate reserves near Aldan at 3 billion
metric tons. the
USSR plans to invest $190 million over the next 10
years to develop these deposits with Japanese assist-
ance. Development of the deposits will make it possi-
ble to increase supplies of badly needed phosphate
fertilizers to Siberia. Supplies are now transported
from the western part of the country. Given large
regional demand, little of the eventual output from
Seligdar probably will be available for export
Udokan. The Soviets have said that the opening of the
BAM through the Chara station will promote exploi-
tation of the Udokan copper deposit-one of the
largest in the world. Discovered in 1949, Udokan
reportedly has high-quality ores and the potential to
support production of 400,000 metric tons of copper
per year-equivalent to about one-third of the total
produced in the USSR during 1983.
Future export opportunities 25X1
seem dim, however. The world market for popper is in
a slump whose end is not in sight. Moreover, Soviet
domestic demand for the foreseeable future can be
met by ample and more accessible deposits closer to
the industrial heartland.
Neither the Soviets nor foreign investors are likely to
contribute the capital required to develop Udokan
now. Western experts estimate that total infrastruc-
ture and industrial development could cost well in
excess of $2 billion. This would make it the most
expensive single development project along the BAM
corridor. The Japanese-realistically the only partner
for the project-have resisted Soviet overtures for
joint development of Udokan since the mid-1960s,
even when the outlook for world copper demand was
much more buoyant.
Molodezhny Asbestos. the
Molodezhny deposit, located about 25 km south of the
Ust'Muya station on the BAM, contains 18 billion
tons of long-fiber asbestos ore of an unusually high
grade. Until a few years ago
Soviet prospects for penetrating the Pacific Basin
market by 1990 were better for asbestos than for
other resources available in the BAM zone. Since
then, worldwide concerns about the health hazards of
asbestos have contributed-to a significant softening in
the market. Furthermore, experts at the US Bureau of
Mines note that the market for the long-fiber grades
has fallen even faster than that for other grades. The
Soviets probably will shelve large-scale development
of the Molodezhny deposits until the West determines
what-if any-measures it will take to regulate the
use of asbestos. Moscow in the meantime may opt for
some small-scale development to support regional
expansion of the cement industry.
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Realistically, Japan has been and continues to be the
Soviets' only partner for developing Siberian re-
sources. Soviet and Japanese representatives will re-
turn to the negotiating table this fall for trade talks.
Siberian projects reportedly are on the agenda.
No major agreements on such projects are expected to
be reached at the meetings. Even during the mid-
1970s, when mineral and metals markets were more
robust, USSR-Japanese negotiations for joint devel-
opment of Siberian resources produced only limited
agreements.' Since then, world mineral and metals
markets have softened, and Tokyo has become more
cautious about diversifying its sources of raw materi-
als. The Japanese-who so far have insisted on com-
pensation deals with the Soviets in Siberia-will be
unlikely to finance arrangements that would tie them
to substantial imports of commodities for which de-
mand looks poor (metals), or uncertain (Molodezhny
asbestos), or for which they have developed alternative
suppliers (Chul'man coking coal).
In view of the poor prospects for resource develop-
ment, the Soviets may well have to be satisfied with
the achievement of secondary objectives when the
BAM is fully operational later in the 1980s. One of
the early justifications for the BAM was that it would
be a more secure alternative to the Trans-Siberian
Railway (Trans Sib) for moving military supplies and
troops to the Far East. Indeed, when surveying of the
BAM resumed in the mid-1960s, Sino-Soviet relations
were tense. Even with today's long-range missiles,
supersonic jets, large-capacity transports, and better
Sino-Soviet relations, the military probably still sup-
ports the BAM as a strategic link to the Far East.'
During peacetime-when fully operational-it will
ease the strain of troop rotations and resupply, which
often disrupts traffic on the now crowded Trans-Sib.
exchange becomes acute.
After the 1973 Arab oil embargo, the Soviets hoped
that the BAM could be used as a supply route for
crude oil shipments between Tyumen' and the Far
East. In 1974 Moscow proposed sending up to 25
million tons of crude oil to Japan via the BAM in
specially designed eight-axle tank cars. The Japanese
rejected the deal. Growth in Soviet oil production has
slowed dramatically in the 1980s, and world oil trade
is a buyer's rather than a seller's market. Despite
Japanese disinterest and the changed outlook at
home, the Soviets pursued development of their eight-
axle tank cars-which now can find only limited
domestic use-and developed about 8 million tons of
now excess refining capacity in the Far East. They
may use the BAM for transporting oil from Tyumen'
to the Far East. The possibility remains-although
remote-that the Soviets will try to resurrect the oil
export deal on a smaller scale if the need for foreign
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The BAM's prospects for earning foreign exchange
are brighter as an alternative route to the Trans-Sib
for land-bridge service.9 The Soviets now earn about
$300 million a year from such service, although they
recently have lost some of their competitiveness in the
Asia-to-Europe route to independent container ships
that have been able to undercut both fixed shipping
rates and those of the Trans-Sib land bridge. The
BAM, which is several hundred km shorter than the
Trans-Sib provides a second route for increasing the
capacity of container shipments, particularly if
container-handling facilities are added at the port of
Sovetskaya Gavan'. The BAM, even in partial opera-
tion, could help ease some current problems with the
service. For example, it could be used to return empty
container cars to Far Eastern ports, reducing the
strain on the Trans-Sib.
A major expansion of the car-handling facilities at
Tayshet, where the BAM and Trans-Sib converge,
will be required before the BAM can be used as an
important alternative to the Trans-Sib for general
economic cargoes, materiel and men for the militar
or land-bridge service
The BAM's budget survived and probably grew even
during the difficult economic times in the USSR
during the late 1970s and early 1980s. Once the
national spotlight has shifted, the BAM may not
command the same priority when investment de-
mands are rising in other sectors of the economy-
including the rest of the railways. Nevertheless, Sovi-
et claims suggest that work to bring the railroad into
full operation could cost an additional 2-4 billion
rubles. To meet the new deadline-in 1987 or 1988-
the Soviets would have to maintain at least the
current budget of roughly 500-600 million rubles per
year. If the BAM budget does not survive, completion
could be pushed into the 1990s.
A system that currently moves freight containers from the Far
East to Europe along the Trans-Sib at costs below standard
conference shipping rates. The BAM would offer additional or
Whatever money is allocated will have to go to the
long-neglected infrastructure-railway stations, re-
pair facilities, and a solid construction base, as well as
the social services and housing necessary to attract
and hold a willing labor force. Neglect of this infra-
structure could degrade appreciably the BAM's abili-
ty to serve Soviet economic and military interests.
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1974: The Soviets announced that construction of the BAM was to resume. We assume
only negligible amounts were actually spent on the BAM in this year.
Appendix
Methodology for Deriving BAM
Construction and Installation Costs
Derived from the 1978 Soviet claim that over 1 billion rubles of capital
investments had been spent on the railway (Summary of World Broadcasts,
SU/W976, 14 April 1978). The 1 billion rubles is divided equally between the
years 1975 through 1977.
Derived from the Soviet claim that 380-400 million rubles was to be spent on
construction and installation work in 1978. (SWB, SU/W976, 14 April 1978.) The
midpoint of the claim is used.
Derived from estimates for 1976 through 1978, and the Soviet claim that 2 billion
rubles were allocated for building the BAM during 1976 through 1980. (Zhelezno-
dorozhnyy Transport, No. 12, December 1976, pp. 3-5.) The residual is divided
equally between 1979 and 1980.
1981: Derived as the midpoint between the estimates for 1980 and for 1982.
Derived from the estimate for 1983, the Soviet claim that spending for the BAM
was to increase by 90 million rubles in 1982 (Gudok, 25 December 1981, p. 2), and
our analysis that this increase was
not implemented until 1983.
Derived from the Soviet claim that construction and installation expenditures on
the BAM were as much as those on West Siberia-or 600 million rubles (Daily
Report-Soviet Union, FBIS-SOV-84-164, 22 August 1984, Vol. III, No. 164,
p. R3).
Note: Soviet claims about BAM construction and installation costs, like other
investment claims, are thought to be in constant 1973 prices. These costs exclude
work done on 1,188 km of the BAM completed by the early 1950s.
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