Euroasian Rail Skyway Systems Ltdyunitskiy.com/author/2014/2014_12.pdf · 2014-07-30 · €...

Euroasian Rail Skyway Systems Ltd Business Plan /Table of Contents 2

ContentsExecutive Summary ................................................................... 3

The Need for a New Transport Infrastructure ..................... 3

Our Solution ........................................................................ 4

The Opportunity .................................................................. 5

Introducing Euroasian Rail Skyway Systems Ltd ............... 6

Our Strengths ..................................................................... 8

Financial Summary ............................................................. 9

The Company ............................................................................ 10

Board of Directors & Management ..................................... 12

Patents & Technology ................................................................ 14

Profile - Dr Anatoly Yunitskiy ..................................................... 15

Startup Summary ....................................................................... 16

Product & Services .................................................................... 17

Rail Skyway - String Transport System ..................................... 25

Sales Process ............................................................................ 26

Competitors ................................................................................ 27

Target Market ............................................................................. 30

The Market ................................................................................. 33

Market SWOT ..................................................................... 34

Key Market Profile .............................................................. 36

The Shanghai Declaration of Better Cites, Better Life ............... 42

From Competitor to Partner ....................................................... 43

Transportation Systems of The Future ...................................... 44

Extreme Climatic and Topographic Conditions .......................... 45

Implementation Summary .......................................................... 46

Research and Development ............................................... 47

Capital Raising & Use of Funds .......................................... 48

Strategic Growth Plans ....................................................... 49

Financial Targets ................................................................ 50

Creating the R&D Test Centre ................................................... 51

Working Group 1 ........................................................................ 53

Working Group 2 ........................................................................ 54

Working Group 3 ........................................................................ 57

Working Group 4 ........................................................................ 58

Timeline ..................................................................................... 60

Opportunity to Investors ............................................................. 61

Euroasian Rail Skyway Systems Ltd Business Plan /Executive Summary 3

Executive Summary

The Need for a NewTransport Infrastructure

Major international gateway and corridor infrastructures such asports, airports and key rail routes are crucially important to theexports and imports of all the products and resources of modernday economies.

Current gateway and inland transport infrastructure capacity will notbe adequate to meet 2030 demand. Most of the current gatewayand corridor infrastructure could not handle a 50% increase, letalone adoubling of passengers in 15 years or a tripling of freight in 20years.(OECD)

In the future, given expected limitations on public funds increasedprivate sector investment in strategic transport infrastructure will beessential.

Transport infrastructure is expensive to build, and then costly tooperate and maintain. It is also usually a time consuming processfor environmental and commercial approvals as well the process ofconstruction. However the lack of adequate infrastructure isdebilitating for a nation


Our Solution

During the construction phase of customer projects Euroasian RailSkyway Systems Limited will provide the services of a generaldesigner; general contractor services and service providersresponsible for the know-how of the bearing elements.

During the operational phase of the targeted projects, EuroasianRail Skyway Systems Limited will receive royalties to compensatefor the costs of R&D and the warranty insurance fund.

Services of the post-production group are to be provided includingpreparation and certification of customers staff, monitoring ofbuilding structures and ongoing maintenance services.

Euroasian Rail Skyway Limited will also receive income from equityand full participation in the targeted transport projects includingprojects for the creation of production elements of a track structureand rolling stock, various support systems as well as sales andservice projects for transport infrastructure


The Opportunity

Opportunity to increase a transport networks capacity with moreefficient track utilisation.

A lower environmental impact due to track elevation avoids heavyearthworks and embankments with greater flexibility to deployacross a range of terrain and areas with hazardous weatherconditions

The key criteria and benefits of our string transport system focuseson utilising less construction material, lighter and faster trainscreating less damage to track structure with lower maintenance,aerodynamic and energy efficiency with lower emissions.

Our vision targets rapid growth reflecting the urgent need in themarket for better and alternative transport solutions and to becomean industry leading supplier of haulage solutions. This involves anumber of growth phases as the company scales fromdemonstration to commercial contracts, and opportunities for earlyinvestors to see their value within the company grow.


Introducing Euroasian RailSkyway Systems Ltd

Euroasian Rail Skyway Systems Limited is focused on worldmarket demand for passenger and freight transport systemsproviding competitive transportation services and solutions.

The company produces a set of services for the design andconstruction of rail track structures, manufacture of rolling stock anddevelopment of necessary infrastructure with the operation oftransport systems that are based on the perspective Rail Skyway(String Transport Systems) technology.

Rail Skyway technology provides the infrastructure and know-howfor transportation services (including passengers and cargo to aspecific user) that are safe, comfortable, clean and affordable.


Our Business Model

> The ultimate goal for the implementation of an innovative transportsystem is the provision of transport services for overheadtransportation of passengers and cargo resulting in safe,comfortable and clean services regardless of time of day and yearand any climatic conditions.

> A certification centre for Rail Skyway technology demonstratingcargo, passenger and rapid solutions will be created.

> Rolling stock and other equipment necessary for testing andcertification will be designed and built.

> Customer demonstration of the Rail Skyway transport system willbe designed and performed for our potential customers.


Our Strengths

1 We design and produce workingdocumentation for rolling stock,transport flyover andinfrastructure includingequipment for terminals andstations, turnouts and automatedcontrol systems.

2 The String Transport System isdesigned to carry a full range ofcargo over a full range ofdistances with consistently highefficiency

3 All the string transport systemsare effective electricity &informationcable transmitting systems basedon supporting and anchorcolumns.

4 There is a full range oftechnology providing high speed(<500 kmph) intercity,international cargo andpassenger transport systems withcapacity of 500k pass. per day;City public transport systems withcapacity of 25k pass. per hour &high productive transport systemsup to 250M tons per year.


Financial Summary

We are seeking an investment of £186Mfrom an investor for 35% in the shareholdingof the business.

The amount

will be used to fund the creation of our R&DTest Centre as well as teams responsible forour income generation.

Euroasian Rail Skyway Systems Ltd Business Plan /The Company 10

The Company

Company Ownership

Euroasian Rail Skyway Systems Limited is incorporated in England& Wales with a company registration number of 08745295 and aregistered company address of Suite 2, 23-24 Great James Street,London, WC1N 3ES.

The company was registered in October 2013.

Please NoteDr. Yunitskiy intends to transfer his shareholding into the ownershipof Euroasian Rail Skyway Systems Limited.

We also have a number of investors who have a combined minorityshareholder of less than 1%.

Euroasian Rail Skyway Systems Ltd Business Plan /The Company 11

100%

Dr. AnatolyYunitskiy

10%

Global TransportInvestments Inc

89%

Multiple Investors

1%

Euroasian Rail Skyway Systems Ltd Business Plan /Board of Directors & Management 12

Board of Directors &Management

Dr . Anatoly YunitskiyManaging Director / CTO

Summary

Anatoly is the author of over 10 scientificbooks, over 200scientific papers and the inventor of over150 inventions.

Key Skills

Railway Engineer; Technology andScientific-Research specialist on patentsand inventions; High-rise buildingsEngineer

Highlights

Doctor of Philosophy on Transport since2002, Academician of RAES - 1999 and anumber of other degrees and awards forthe development of the transport sector.

Sibiryakov Sergey PhDCEO

Summary

Strategic management and planning

Key Skills

Graduate of the Institute of Economics (1994)and completed a doctorate in Institute forSystems Analysis (1999), both from theRussian Academy of Science.

Highlights

Since 1994 he has held several executivepositions working with Euroasian on variousprojects since 2000.

Euroasian Rail Skyway Systems Ltd Business Plan /Board of Directors & Management 13

Denis YunitskiyCEO

Summary

Over the past 20 years Denis has heldmanagement positions in a number ofcompanies created for the development ofstring technology.

Key Skills

Since 1994, Denis is the main assistant toDr. Yunitskiy, engaged in guidance andproviding funding for the development ofthe string transport system.

Highlights

Denis has a Bachelor Degree inEngineering Economics, a degree indesigner of high-rise buildings and studiedBelarusian-American courses on businessplanning.

Victor BaburinCEO

Summary

Victor has worked on various corporate andcommercial legal projects.

Key Skills

Victor is also acting as the Company Secretaryensuring the company remains compliant withthe law, governance and shareholdercommunications.

Highlights

Victor has a Bachelor law degree andeconomic degree and specializes in advisingstart-ups and small / medium technologybusinesses in Russia.

Euroasian Rail Skyway Systems Ltd Business Plan /Patents & Technology 14

Patents & Technology

The String Transport System Technology has beendeveloped in Russia and includes a suite of over100 inventions, protected by 43 patents, inpassenger and freight transport systems as well assignificant technical know-how in materials andtechnology applications.

The technology has already been awarded tworounds of United Nations HABITAT grant fundingand a number of important transport innovationawards, including a technical feasibility expertreport from the Institute of Transportation ProblemsRussian Academy of Science.

Euroasian Rail Skyway Systems Ltd Business Plan /Profile - Dr Anatoly Yunitskiy 15

Profile - Dr Anatoly Yunitskiy

The String Transport System founder and inventor Dr AnatolyYunitskiy has been developing the principle of "String Transport" for30 years. Having produced designs and technology for lighter,faster, cheaper and more environmentally sustainable transportsystems the development of the technology is reflected in thenumerous patents, designs and awards presented to Dr.Yunitskiy.

His doctoral work has also been highlighted in "The Optimisation ofTransportation"

Dr. Yunitskiy graduated as Bachelor of Engineering of TransportInfrastructure, he also holds Bachelor of Law in Patent Law and IPprotection. He holds the highest level of membership (Academician)of The Russian Academy of Natural Sciences and is also a memberof the USSR Federation of Cosmonautics.

Dr. Yunitskiy has an honorary award the "Knight of Science andArt" by The Russian Academy Of Natural Sciences. He is also aprolific Author of more than 100 publications in scientific andpopular scientific journals and of five scientific monographs.

Other famous scientists to hold the title of Academician in TheRussian Academy of Natural Sciences include 26 Nobel Laureatessuch as the former USSR President, Mikael Gorbachev.

Having served a distinguished career in Public Service andGovernment Institutions, Dr.Yunitskiy commenced work on theString Transport System as the General Director and GeneralDesigner.

He has built a highly skilled project team in the fields of civilengineering, mechanical engineering, architecture, structuralengineering, finite element analysis and automotive engineering.

Euroasian Rail Skyway Systems Ltd Business Plan /Startup Summary 16

Startup Summary

The Directors, present owners and existingshareholders have invested up to 36 yearsin development of the technology and thesystems, including considerable funds, timeand effort in research, development,intellectual property, contracts, processesand systems of the business to achieve thisstage of the development.

Setup Costs

Working Group 1 4900000




Total : 16,700,000

Euroasian Rail Skyway Systems Ltd Business Plan /Product & Services 17

Product & Services

Preliminary Research (Scoping Study, PreliminaryStudy)

Scoping and Preliminary Studies Services

Concept

At the stage of development combined withthe creation of a full scale project anddesign bureau in the company takingbetween one and one and a half years toestablish, we will focus on attracting thecustomers for scoping and preliminarystudy services.

There are three average prices for thepreliminary scoping study for different typesof technology development:

1) Cargo – GBP 300 0002) City – GBP 500 0003) Rapid – GBP 600 000


USP

The comprehensive research providesdetails and benefits for the usage of theproposed technology for our customers’specific projects. The average market valueof each study is $1M, which allows us topropose a lower market price.

For example in Australia (2011) wecompleted a preliminary scoping studyreport for the technology‘s application toQueensland‘s South Galilee Coal project – ajoint venture between AMCI Capital andBandanna Energy for 300 000 AUD.

In Russia (2009) we completed a preliminaryscoping study report for the technology‘sapplication in Khanty-Mansi AutonomousOkrug (Area Total 534,800 km2 (206,500 sqmi) under the contract with government for600 000 USD.

Direct Competitor

In many cases competition in this area willbe evident from other providers in a publictender process where project plans and bidswould have to be placed depending on theinfrastructure requirements of the transportproject to be scoped.

However, with the presentation of thetechnology and the difference to othertransport infrastructure solutions, thetransport infrastructure project may bespecific in nature and each provider wouldrequire to align with the requirements of thepublic or private customer unless theprovider is approached by the customer inthe first instance.


General Designer

Project Design and Scope of Work

Concept

At the stage of market entry we have adefined pricing and revenue amount (%),which should attract additional demand dueto low prices on project and design works.

Average cost of Skyway Rail transportsystem (freight, passenger and rapid)including track structure, rolling stock andinfrastructure is estimated at $2-7M per1km (depending on the system type, trafficvolume and type of area, weatherconditions, etc.)

That is significantly lower than the cost forthe implementation of existing transportsolutions.

The accepted practice in the world marketof the transport industry is that the cost ofthe project and design works is 6-10% ofthe total system cost. It is clear that this isan estimation for volume of works and timecosts of highly skilled professionals who willresearch the project documentation.

This includes the profit of the projectcompanies. On average, it turns out thatwith the cost of the road (such as monorail)approximately at $1B, and its length is 20km, for project & design works the spendingis around $80M, or $4M/km.


USP

We are ready to announce the revolution inmarket prices based on our 36 years ofexperience for the development of theproject, project design and surveydocumentation.

We will research documentation for anyproject, in terms of 1km, 4-5 times cheaperthan traditional market price.

This is due to the unique Skyway Railtechnology and standardisation of manyaspects in the design. With less staffrequirements for maintenance this results inless fixed costs.

Every 1km of track structure built withSkyway Rail Technologies will be at least 5times cheaper than any other mode oftransport.

The customer has the direct benefit fromordering the project and the designdocumentation.

Euroasian Rail Skyway Systems Ltdincreases interest rates for design andproject works to 20 % from the entiretransport system cost.

Direct Competitor

The project design and scope of work wouldtake a similar path to the project scoping andpreliminary studies, scoping and designwould follow on from the study stage of theproject development and planning process.


General Equipment Contractor

Managing the Ongoing Maintenance

Concept

After the completion of project and designworks.

Euroasian Rail Skyway Systems Ltd will actas general equipment contractor, includingtrack structure, rolling stock andinfrastructure, which will be produced bysubcontracted providers. (i.e. factories,manufacturers etc.).


USP

We utilise the expertise of the factory ormanufacturer to implement the project whileclosely managing the progress of the projectand liasing with the customer on all technicalaspects.

Direct Competitor

There are many qualified generalcontractors and engineers in any countrycapable of managing a project on behalf of acustomer although they would not have thetechnical expertise to do so in this case.


General Contractor

Technological Know How

Concept

Our design and technological know-how willbe used during the process of constructionand installation including technologicalequipment.

This will allow us to act as the generalcontractor in the project.


USP

Since all major building and constructionworks will be performed on a subcontractorbasis, we will be able to generate anadditional 4% from the entire transportsystem cost.

Direct Competitor

Similarly general contractors are availablehowever they would not have the technicalknow how in this case to manage a projectof this nature.

Euroasian Rail Skyway Systems Ltd Business Plan /Rail Skyway - String Transport System 25

Rail Skyway - StringTransport System

The String Transport System is a special automobile on steelwheels that is put on two string-rails installed on supports.

High smoothness and rigidity of a string track structure makes itpossible for the string transport system to easily reach the travelspeeds of 250—350 km/h that in future could be increased to450—500 km/h.

It is possible to design routes as multiple-track structures withtracks located either on common or free standing supports.

String-rail is a conventional un-plit (along the whole length) steel,reinforced concrete or steel reinforced concrete beam equippedwith a rail head and additionally reinforced with pre-stressed(stretched) strings.

Maximal string tension per one rail (depending on a span lengthand mass of the rolling stock) is 100—500 tons (at +20 °Ctemperature). It combines the qualities of a flexible thread (at alarge span between the supports) and a rigid beam (at a small spanunder the wheel of a transportation module and above the support)therefore under the impact of a concentrated load of the wheel thedeflection (curvature) radius of a string-rail will be equal to300—500 m and more.

A string-rail is characterised by the high degree of strength, rigidity,smoothness, technological production and mounting, low materialconsumption (steel: 20-50 km/m, concrete: 0.005-0.015 cub. m/m)and a wide range of working temperatures (from -70 to +70 °C).

It provides an ideally smooth road for the rolling wheels as it has notechnological or temperature joints along its whole length (rail headis welded as a single weaving). The cost of the assembledstring-rail is estimated from US$ 50,000 per 1 km which, forexample, is less than that of the assembled rail of a railway.

Euroasian Rail Skyway Systems Ltd Business Plan /Sales Process 26

Sales Process

Step 1

Euroasian approaches the potentialclient and presents the concept.

Step 2

The potential client makes the go or nogo decision

Step 3

On go, Euroasian and the client will signan indemnified contract to proceed withthe agreed scope of work that isrequired.

Step 4

The agreed scope of work commencesafter the client has paid the firstinstalment based on the agreed scheduleof project payments

Step 5

Euroasian completes the projectsuccessfully and invoices the client forthe remaining amount that is to paid.

Step 6

The project is signed off as completed,full payment is received and Euroasianmove onto work with the next client.

Euroasian Rail Skyway Systems Ltd Business Plan /Competitors 27

Competitors

Rail & Road TransportVarious

Strengths

1 Rail & Road transport is a majorform of passenger and freighttransport worldwide

2 Railways and highways channelgrowth toward dense cityagglomerations and along theirarteries

Weaknesses

1 Infrastructure investment in railand road networks is capitalintensive

2 Pollution and congestion aremajor drawbacks of roadtransport in busy urban areas

Various


PipelineVarious

Strengths

1 A pipeline provides a directsource for cost-effective, secure,clean and reliable energy acrosslong distances and difficultclimatic and topographic terrain.

2 Pipelines offer a number ofadvantages, some of which aredecisive, in relation to othertransportation methods includinglarge volume transportation,secure supply and cost efficiency

Weaknesses

1 The initial costs of laying apipeline infrastructure is alsocapital intensive

2 Permanent locations limit thetransportation to differentlocations, the transport is slowerwith fixed pipelines also targetedfor sabotage

Various


AircraftVarious

Strengths

1 It is the fastest and the safestmode of travel for travellers ordispatching cargo over longerdistances, cross border andoverseas

2 Nowadays, there are manyairlines that have a large networkwith a worldwide reach. Airlinesalso accept each other’s airwaybills and that means theshipper can send his shipment tonearly every destination using thesame air waybill.

Weaknesses

1 The charge associated with airfreight and passenger air travel isoften the most expensive form oftransportation

2 For cargo, shipments arenormally in larger quantities withsmaller shipments seen as morecost effective via other forms oftransportation over land or bysea.

Various

Euroasian Rail Skyway Systems Ltd Business Plan /Target Market 30

Target Market

Federal, State,Provincial, andMunicipalGovernments

Market Share

High%

An innovative technology is now able tocompete effectively only in those segmentswhere traditional transport systemsessentially lose.Focused on mining companies, portauthorities, municipalities, cities, regionaladministrations, governments. The targetmarket also includes the administration ofmegacities and public transport operatorsinterested in increasing the capacity of urbanpublic transport routes due to the rise oftraffic flow on the "second" ( trestle ) levelthat can be effective only in the case of 2ndlevel transportation system.In addition almost any project can berealised via partnership and co-operationdue resulting in projected high profit marginsand the customer will become themanagement company created for therealisation of a particular project.

Main Facts

1 Federal, State, Provincial andMunicipal Governments are themain decision makers indeveloping the transportinfrastructure including urbanroad, urban/inter-city rail andhighway networks

2 Public ownership of rail networkshas been partly replaced by theinternational trend which hasbeen towards privatization,however in many countriesresultant problems have led to amore mixed solution, particularlyin the UK.Some national railways werealways under direct statemanagement, some werestate-planned but privatelyoperated (e.g France) with otherswholly private enterprises andlightly regulated (e.g. GreatBritain, Ireland and Spain).


Mining, Oil & Gas andPrivate Industry

Market Share

High%

The industry needs a strong logisticsprocess to cope with increasing volumesand the difficulty in exploration andextraction of new commodities.

Main Facts

1 As a mature industry, miningcompanies must achieveenhanced profitability, in largepart, through best in classperformance and disciplined costcontrol as market demand fortheir products strongly fluctuates.At any point and time, commodityprices may be high or low, butmanagement teams know thatcommodity price levels arecyclical. In the face of fluctuatingdemand and cyclical pricing,operating an efficient andstreamlined business, as well assqueezing costs, is critical.

2 Operators have a rising numberof supply chain challenges toovercome. The increasinglyglobalised economy has mademaintaining an optimised supplychain network more intricate andcomplex.Private organisations need tocontinue delivering effective orderfulfillment practices withoutincreasing cost. The greatervariety of manufacturing anddistribution options shows thatorganisations should repeatedlyexamine their processes forpotential cutbacks andimprovements.


Port and HarbourAuthorities

Market Share

Medium%

Most harbour authorities are governed bytheir own local legislation, which is specificto each authority and tailored to meet theneeds of each port/harbour. Under theselocal acts and regulations, the port andharbour authority is responsible foradministering the ports and coastal waterswithin its jurisdiction, for the main purposesof ensuring the navigation and safety ofvessels using them.

Main Facts

1 In the era of a globalisedeconomy a port is no longer amere interface between maritimeand land transportation but hasbecome a strategic centre ofglobal and seamless logisticssystems.It is important for major portsaround the world to tackle theemerging trend of transformationin any respective portmanagement strategies.

2 Port authorities instill services &controls that safeguard thecompliance to international andnational legislation, theses aremainly inspections that aim tomaintain high standards andfulfillment of various IMOConventions.

Euroasian Rail Skyway Systems Ltd Business Plan /The Market 33

The Market

Statistics

Worldwide, the most widely used modes forpassenger transport are the Automobile(16,000 billion passenger km), followed byBuses (7,000), Air (2,800), Railways (1,900),and Urban Rail (250)

Source:European Commission

The most widely used modes for freighttransport are Sea (40,000 billion ton km),followed by Road (7,000), Railways (6,500),Oil pipelines (2,000) and Inland Navigation(1,500).

Source:European Commission

Many ports and harbours located in or nearEuropean marine sites already conduct theirevery day activities and operationsaccording to environmental codes of conductor good practice guidelines. Some portshave developed their own guidelines, othersfollow existing guidelines, such as thoseproduced by the European Sea PortsOrganisation (ESPO) and British MarineIndustries Federation (BMIF), or abide byenvironmental guidelines provided by localestuary management plans.

Source:UK Marine SACS Project


Market SWOT

Strengths

1 Travel is an important facet ofmost people’s lives, and thepermanent nature oftransportation infrastructuredirectly shapes urban form. Thisform, in turn, impacts land use,land values, and wages. Travel isa byproduct of the need to work,shop, run errands—essentially,produce and consume. The needfor travel is a derived demand, asopposed to a direct demand(which consumers get directsatisfaction from), such as theneed for food, clothes, and otherconsumer goods.

2 Given the longevity of transportinfrastructure, system changesoften have long-term effects oneconomic activity. Subsequentchanges to residential andemployment location patternswill, in turn, influence futuretransportation demand

Weaknesses

1 Most non-conventionaltechnologies are perceived asnew, experimental and untried.Not enough people are aware ofthe many different types oftransport systems in operationtoday along with their proventrack record.

2 There are many variables whichinfluence the price of building atransport system and most formsof rail transit.


Opportunity

1 An efficient, economic transportsystem is a key element in theviability of the mining and portindustries.As more remotedeposits are discovered andworked, as production volumesincrease, and as themanufacturing/production chainspeeds up, it is crucial that thetransport infrastructure issimultaneously developed andexpanded.

2 While recent years have seensignificant investments intomining projects and pit-to-portinfrastructure in developingcountries especially in Africa,there remains a glaring deficiencyin bulk ore transport systems.

Threats

1 The conventional road and railindustry has established astronghold on the market andalternative new transporttechnology and systems are ofteneliminated in the early stages ofplanning for more conventionaloptions.

2 Pressure on transportationsystems worldwide is mountingdue to an ageing infrastructure,population growth, increasedfreight volumes, and fundinglimitations. Today’s challenge isto maintain the integrity andincrease the capacity of existingfacilities to meet this demand –economically, safely, and withinthe tight schedules required.


Urban/ Rapid IntercityTransport

Urban transportation and intercity systems inand between most developed anddeveloping cities are far from ideal.The most visible and frequently mentionedtransport problem of a city is its trafficcongestion and it is well known that highlevels of congestion create a significantimpact on local and national GDP.An accessible and affordable publictransport service and safe infrastructure fornon-motorized transport such as cycling andwalking are lacking in most developingcountry cities. The number of privatevehicles has been increasing continuouslyand dominates the roads and as a result, thetransportation sector is heavily responsiblefor public health issues in cities such as airpollution (acidification, smog), noise,greenhouse gas emissions, and roadaccidents.Typically, rapid intercity transportation isprovided by trains with an express trainpassenger service and covers longerdistances than commuter trains, at speedsof 160 km/h (100 mph) and more.Some characteristics of intercity train serviceinclude fewer stations along the alignmentwhen compared to urban systems, longerdwells in stations, baggage racks, andgenerally, fewer doors on the trains.

Changes to Market

The first mega-cities emerged 30 years ago.Now the planet has five times as manyurban conglomerations with more than 10million inhabitants. And still the figures rise.By 2015 there will be 22 mega-cities.With one in two of the world’s populationliving in cities, the need for non-stop urbanand inter-city transport has never beengreater.Urban road and intercity rail networks arethe arteries that keep the heart of ourmodern society beating, and they arebecoming more clogged every day.


Big Players

Promotion of sustainable transport hasbecome a major issue in cities around theworld. Several partnerships have beenestablished to create synergy and leverageresources among different institutions andorganizations. For example, the Partnershipfor Clean Fuels and Vehicles (PCFV), withwell over 100 partners has beensuccessfully working on phasing out leadfrom fuels, establishing standards forlow-sulphur fuels and promoting cleanvehicle technology.The United Nations EnvironmentProgramme (UNEP) acts as the ClearingHouse for the PCFV and also works in thearea of fuel economy (Global Fuel EconomyInitiative), public transport and investment innon-motorised transport (Share the RoadInitiative) (www.unep.org/transport).The Partnership on Sustainable Low CarbonTransport (SLoCaT), www.sutp.org isanother example. With over 30 members, itaims to provide options and advice for theestablishment of sustainable transportsystems.

Trends

In 2011 the European Commission adopteda comprehensive strategy (Transport 2050)for a competitive transport system that willincrease mobility, remove major barriers inkey areas and fuel growth and employment.At the same time, the proposals are aimedat dramatically reducing Europe'sdependence on imported oil and cut carbonemissions in transport by 60% by 2050.To achieve this will require a transformationin Europe's current transport system. By2050, key goals will include:No more conventionally-fuelled cars incities,40% use of sustainable low carbonfuels in aviation; at least 40% cut in shippingemissions, a 50% shift of medium distanceintercity passenger and freight journeys fromroad to rail and waterborne transport.All of which will contribute to a 60% cut intransport emissions by the middle of thecentury.(Source: European Commission)


2nd LevelTransportation

Mono Rails/ elevated highway and railwayroads and trains on a magnet suspensionconstitute the majority of the 2nd LevelTransportation systems available in themarket today.

Changes to Market

Monorail systems are in advanced planningor construction in several areas of the world.Elevated rail lines are far smaller in footprintthan elevated highways, and althoughhighways may have been quieter than raillines a century ago, the technology hassurely shifted in rail’s favor with regards tonoise. And even if the technologies wereequally obtrusive on a per-mile basis there ismuch fewer less elevated rail miles totransport the same amount of people as withan elevated highway perhaps even almostan order of magnitude less.Cheaper elevated construction opens thedoor for more rapid transit expansion, butonly if the real negatives of elevatedstructures can be overcome.In addition, a few countries are usingpowerful electromagnets to develophigh-speed trains, called maglev trains.Maglev is short for magnetic levitation, whichmeans that these trains will float over aguideway using the basic principles ofmagnets to replace the old steel wheel andtrack trains.


Big Players

According to the Monorail Society, monorailsare proven. Each and every day hundreds ofthousands of passengers are carried onmonorails. Many of the world's transitmonorails exist in Japan, eight of which arefull-scale urban transit systems. Others existin Australia, Malaysia, Europe, Russia and inthe United States. Several more are eitherunder construction or in advanced planning.Surprisingly, Walt Disney World's MonorailSystem near Orlando, Florida, has one ofthe highest riderships of all monorails. Wellover 100,000 passenger trips are recordedeach day on the 14 miles of beamways (afar higher ridership than most USA light railsystems.Electromagnetic Suspension (EMS) is themagnetic field created by the electrified coilsin the guideway walls and the trackcombining to propel the transport, magneticlevitation, maglev, or magnetic suspension isa method by which an object is suspendedwith no support other than magnetic fields.Magnetic pressure is used to counteract theeffects of the gravitational and any otheraccelerations.

Trends

Railroads of the future will more likely use afriction-free design, employing the attractiveor repulsive force of a magnet to suspendthe train either above or below its track. Insuch systems, the friction and noiseassociated with conventional,steel-wheel-on-steel-rail systems areeliminated, and much higher operatingspeeds and lower track-maintenance costscan thus be achieved.However, the most useful elevated rapidtransit grade-separated mainline rail, or elseover urban streets is seen in the firstinstance as impractical due to communityopposition.


Cargo Transport

A combination of factors led to thenear-destruction of the magnificent freightand passenger railroad system, whoseextension and development had beensynonymous with the growth of the UnitedStates in particular from colonial status tothe world’s greatest economic power. Thesedestructive influences included: the lootingof the railroads by Morgan, Rockefeller,Harriman, and other financial interests,whereby investment in maintenance andreplacement of rail and rolling stock wasdrastically cut, in order to produce anapparent higher rate of return on investedcapital; the postwar collusion of GeneralMotors with the oil monopolies to replaceurban electric-trolley and light-rail systemswith gasoline and diesel-powered buses; theconstruction of the Interstate HighwaySystem, which, while not evil in itself, servedas a taxpayer subsidy to cheapen theapparent cost of trucking over rail; thebureaucratic slowness of the railroads toadopt modern systems of tracking,warehousing, and freight handling.

Changes to Market

This system of globalisation exerts intensepressure for the creation of a moreliberalised global transport system. Theprocess of privatisation andcommercialisation has already had a majorimpact on transport in many regions of theworld, and it continues to affect transportservices virtually everywhere.Even where transport employers have notyet been fully privatised, their transformationinto structures which can easily be openedto private capital, is the first step in acontinuing process of liberalisation. Even inthose countries where governments arereluctant to go down this path, there isincreasing pressure on them frominternational institutions to do so.


Big Players

An export supply chain - beginning with theextraction of ore from a pit and ending withthe loading of this ore on to vessels at a port- is a key component of many miningventures. These supply chains arecomprised of a series of complex operations,such as mining, ore processing,transportation, stockyard management andvessel loading. Two differentiating featuresof mining supply chains are the length oftime over which they operate and the manydegrees of uncertainty that affect each link inthe chain.

Trends

The scarcity of traditional transportationfunding is contributing to a growing gapbetween the funds required forimprovements and the funds available to doso.Although this is the case, the globaltransport industry, both freight andpassenger is going through a period of rapidchange and restructuring, resulting in aprocess of growing concentration in differentsectors, the blurring of borders betweendifferent modes of transport and with otherindustries.The rapid growth in logistics and just-in-timeproduction and distribution has given wellorganised transport organisations apotentially strategic position in the worldeconomy.

Euroasian Rail Skyway Systems Ltd Business Plan /The Shanghai Declaration of Better Cites, Better Life 42

The Shanghai Declaration ofBetter Cites, Better Life

“Cities should respect nature, consider the urbanecological environment as an asset, integrateenvironmental issues into urban planning andadministration, and accelerate the transition tosustainable development. They should promote theuse of renewable energy sources and buildlow-carbon eco-cities.

They should strongly advocate for conservation ofresources and promote environment-friendlymanufacturing. Cities and their citizens should jointogether to create sustainable lifestyles and anecological civilization in which people andenvironment co-exist in harmony.” United Nations

Euroasian Rail Skyway Systems Ltd Business Plan /From Competitor to Partner 43

From Competitor to Partner

Almost all specialised businesses and organisationswith the development of a new generation oftransport will be able to expand production volumeby expanding the range of products, with increasingfocus on RSW technology, moving from thecategory "competitor" to the category partner.This is explained by the simple reason that RSWtechnology composed of elements, components,assemblies and equipment already produced atpresent in any industrialised country in the world,and its launch in

industrial production does not require the creation offundamentally new materials, technologies andequipment.Competitors are not specific companies (e.g.Siemens , Alstom , DoppelMayer), but transportindustries and modes of transport as a whole thisincludes rail, road, pipeline and aircraftThere are many existing specialised companies andorganisations in each segment. That could alsocross over into becoming a partner.

Euroasian Rail Skyway Systems Ltd Business Plan /Transportation Systems of The Future 44

Transportation Systems ofThe Future

Source: http://www.gizmag.com/future-transport/22959/The Evacuated Tube Transport (ETT) system envisionssuperconducting maglev trains operating in evacuated tubes atspeeds of up to 6,500 km/h (4,039 mph) on international trips -that's New York to Beijing in two hours! The proponents of thissystem say that ET3 could be 50 times more efficient than electriccars or trains.

Terraspan goes even further than ultra-efficient mass transport withits vision for a network of superconducting tunnels. As well asproviding infrastructure for "Terraspan trains," this network wouldalso facilitate zero loss transmission of electricity to our homes.

While taking the above ground rail concept further (and then turningit on its head) is Robert C. Pulliam's Tubular Rails.

In this system the trains themselves carry the tracks, while thewheels and motors are contained in elevated rings that the trainpasses through at speeds of up to 240 km/h (150 mph). Becausethe design would cause minimal disruption to existing infrastructureand the technology is readily available, Tubular Rail estimates thatconstruction costs could be 60 percent less than conventionalurban train networks.

In addition to this and while making use of existing infrastructure.The "straddling bus" is designed to roll on stilts above traffic usingsmall tracks positioned between lanes of traffic while passengersget on and off at elevated bus stops. The result: additional peoplecarrying capacity for urban roads, no disruption to traffic and noneed to build completely independent track systems.

Euroasian Rail Skyway Systems Ltd Business Plan /Extreme Climatic and Topographic Conditions 45

Extreme Climatic andTopographic Conditions

Geographical location can enhance or diminish the harmful impactsof forceful weather phenomena. For example, dense forests andvegetated areas bind rainwater effectively and even out floods.Uncovered land is prone to erosion and increases flood impacts.Also steep topography fortifies flooding rivers and is one reason foravalanches.

Snow, low temperatures, wind and their combinations seem to bethe most harmful weather phenomena for railway infrastructures.Snow can block tracks and yards, accumulate on cuttings anddamage cables. As a result snow and freezing can forge loss ofelectricity. Low temperatures also cause load on safety devices,which may become overheated as well as freeze and thaw cyclesplacing pressure and excess strain on equipment and machinery.

The reliability of the supply chain is the most important qualityrequired from logistics service providers. A high degree ofuncertainty means that operators and shippers may adopt costlyhedging strategies such as high inventory or reserve levels neededfor emergency/crisis management.

Supply chains, especially those that span large geographicaldistances or difficult terrain, cut across multiple country territoriesand/or involve multimodal transport are exposed to both externaland internal risks.The magnitude of external risk is typically exacerbated by thedependence of logistics services on public and privateinfrastructure such as roads, airports and harbours and railnetworks.

Euroasian Rail Skyway Systems Ltd Business Plan /Implementation Summary 46

Implementation Summary

The implementation scheduling is focusedon the development of the R&D TestingCentre as well as the technical, project anddesign bureaus that will be created over thenext twelve to eighteen months.

First Year Projection

Step 1Research andDevelopment

Step 2Capital Raising & Use ofFunds

Step 3Strategic Growth Plans

Step 4Financial Targets


Research and Development

PRIMARY GOAL:

Research & Development Centre

MILESTONES

1 Creating the Testing Centre

2 Esablish Working Groups to Createthe Blueprints


Capital Raising & Use of Funds

PRIMARY GOAL:

Establish the Testing Centre and Creating Working Groups

MILESTONES

1 Design Bureau Rolling stock for bulkcargo, passenger and rapid

2 Design Bureau Transport flyover

3 Design Bureau Terminals &Infrastructure

4 Marketing. Preparation of thecustomer base and orders. Regulatoryframework. Legal support


Strategic Growth Plans

PRIMARY GOAL:

Invest in Infrastructure and Gain More Customers

MILESTONES

1 First scoping project commences inJune 2014

2 First Infrastructure Project Designcommencing in April 2015


Financial Targets

PRIMARY GOAL:

To Reach the Targets. disclosed in the Business Plan

MILESTONES

1 Target Sales $95M by the end of YearThree

2 Target Investment amount £186M -Full Scale Certification Testing Centre- Full Scale Prototype

3 Target CashFlow $20M by the end ofYear Three

Euroasian Rail Skyway Systems Ltd Business Plan /Creating the R&D Test Centre 51

Creating the R&D TestCentre

Costs on construction of “Demonstration and certification prototype“Skyway Rail – bulk cargo, passenger, rapid” (Prototype) in the firststage may be minimised. In order to complete this we will focus onthe design and construction project for the development of basicequipment and on marketing for the formation of long-termcontracts and attraction of investments

The R&D Centre will be created by Euroasian Rail SkywaySystems Ltd, a company that is the owner of exclusive IP Rightsand know-how to Skyway Rail technology.

The main purpose of the R&D Centre is to bring innovativetechnology to blueprints, which will then start the construction of therolling stock and track structure. By this, we will transfer thetechnology from the category of "innovation" into the category of"investment project" and attract the necessary investments for theimplementation of numerous targeted projects. The first of thesetargeted projects will become a Prototype and the customer of thisproject will be Euroasian Rail Skyway Systems Ltd itself.

Euroasian Rail Skyway Systems Ltd Business Plan /Creating the R&D Test Centre 52

Creating the R&D TestCentre Continued

During the preparation of the blueprints our project will beimplemented in the R&D Centre as follows:

Development of the most efficient and high-tech products in thefield of bulk cargo, passenger, rapid transport services;Additional research in the development of innovative designs forrolling stock with an external drive, parts and assemblies in trestletrack structure and terminals;Additional engineering calculations of design - in statics anddynamics during the movement of the rolling stock by the trackstructure, taking into account the impact of wind, temperature andother external influences and pressures on prestressed andstatically indeterminate transport flyovers in order to avoid resonantoperating conditions;Optimal design using modern software tools and methodologies.

Control over the project and organisations of the activities in theR&D Centre will be executed by chief designer and author of thetechnology, Anatoly Yuntskiy, who is also a co-founder ofEuroasian Rail Skyway Systems Ltd.

During the phase of estimation and basic design, documentationdevelopment working groups will be formed to create blueprints, aswell as to interact with businesses to implement prior order and toensure the legal protection and promotion of the technology on theworld market.

Euroasian Rail Skyway Systems Ltd Business Plan /Working Group 1 53

Working Group 1

Design Bureau "Rolling stock for bulk cargo, passenger and rapid"

Within 12 months from the beginning of the funding, workingdocuments for rolling stock will be prepared. Total fundingrequirements - £4,9M

Our rolling stock (RS) will be designed according to internationalstandards (standards UN, U.S., EU and Russia). After certification,RS can be used in targeted projects anywhere in the world. It willbe the most economical and thus the most environmentally friendlycommercial vehicle of all currently known wheeled vehicles.

In terms of safety RS will have no equal among all other types ofvehicles. The "second level" of accommodation availability,anti-derailment system, bearing on the high-strength steelconstruction with a tenfold safety margin, uncritical to adverseclimatic events (snow, fog, rain, icing, flood, earthquake, etc.), highvandal-proof and anti-terrorist stability, absence of unreliablehuman factor in management – all this will make RS unprecedentedsafe.

RS with such unique characteristics, which, moreover, is 1.5 to 2times cheaper than traditional rolling stocks, will be in demand inthe transportation industries anywhere in the world.

The work of the Design Bureau for "Rolling stock" (Working Group1)will be coordinated with the work of design bureaus for "Transportflyover" (Working Group 2) and for "Terminals &Infrastructure.(Working Group 3)


Working Group 2

Design Bureau "Transport flyover"

Within 12 months from the commencement of funding the workingdocumentation on transport flyovers will be prepared (string-rail,prestressed, non-cut and statically indeterminate track structure,intermediate and anchors with foundations).

Total funding requirements - £4,2M

The flyovers will be designed to pass on all types of ground,including permafrost and weak. Optimal spans – have a length ofabout 50 meters, with the possibility of increasing , if necessary, upto 1,000 m. The flyovers will be applicable to targeted projects inany climatic and topographical conditions with the followingcharacteristics:

annual temperature difference - up to 120 ° C,hurricane wind - up to 250 km / h,snow drifts – height up to 5 m,flooding and high water - up to 10 m depth,earthquake - with a magnitude up to 9 on the Richter scale , etc.

The Flyovers will be stable in heavy rains, heavy snowfalls,sandstorms, tsunamis, glaciation, manifestations of terrorism andvandalism. An example of such a transport flyover prototype wasbuilt by Anatoly Yunitskiy and his team in the town of Ozery inMoscow region, Russia , in 2001.

The Transport flyovers will be designed according to bridgestandards (for Russia - Construction Norms and Rules "Bridges andpipes", similar regulations - for other countries), that are the samestandards for all present bridges, overpasses, viaducts, flyovers,including railways.According to Russian and international law certification of transportflyovers is not required. It will be necessary to utilise a number ofother requirements.


Working Group 2 Continued

1) Implementation of expertise for working documents by thecompetent national organisations;

2) Construction of a flyover must be completed strictly by workingdocuments and only from certified building materials;

3) Before commissioning, the transport flyover must be tested withdesigned loads.

The Flyover will be designed to align with linking multi-lines (wire,fiber optic, cellular), power lines, as well as solar and wind powerstations, both for their own needs, and to provide services tothird-party users.

The transport flyover will be resource-efficient, having lower pricethan conventional rail, road or other transport flyover used fortransporting goods at similar volumes of transportation in similarclimatic conditions. Accordingly, the cost of the flyover will bereduced because land acquisition will be reduced (for theconstruction of the two-lane road not more than 200 sq.m. / km isneeded (traditional roads and railways with their mound withdraw atleast 20,000 m2/km soil , that is 100 times more).

It is necessary to underline the benefits, primarily environmental, offlyovers, as the supporting part of a track structure, before thetraditional earthen embankment (recess), and – before the crushedstone and sand cushion and rail-sleeper bars.



During the construction of a transport flyover the amount ofexcavation will be reduced about 100 times in comparison withsimilar freight roads with the mound. Therefore, the landscape andecosystem in a construction zone will not be damaged and will notneed a land reclamation. This is especially important when layingtracks on soft ground and permafrost, which are not able towithstand the additional load from the mound, not only weight, butalso heat.

Transport flyovers with such unique characteristics, which will beless expensive than traditional transport racks and will be indemand in the transport industry.

The work of the design bureau "Transport Flyover"(Working Group2) will be coordinated with the work of design bureaus "RollingStock" (Working Group 1) and "Terminals & Infrastructure"(WorkingGroup 3).


Working Group 3

Design Bureau "Terminals & Infrastructure"

Within 12 months of the commencement of fundingworking documents for Terminals & Infrastructurewill be prepared.

Total funding requirements £4,7M

Passenger stations and automated terminals forloading and unloading of bulk cargo for the miningand coal industry, as well as sea ports specialisingin bulk cargo.

Such infrastructure in comparable conditions are2-3 times less expensive than traditionalinfrastructure.

The work of the design bureau "Terminals &Infrastructure" (Working Group 3) will becoordinated with the work of design bureaus"Rolling Stock" (Working Group 1) and "TransportFlyover"(Working Group 2)


Working Group 4

Marketing. Preparation of the Customer base and Orders.Regulatory Framework and Legal Support

Total funding requirements £2,9M - ready within 15 months of thecommencement of funding

1) Market research of world markets for transport services in urbantransportation, including megacities and conurbations, miningglobal markets, rapid transportation;

2) Determination of customer base:

At least 100 potential customers with projects of an urban andsuburban route.

At least 100 potential customers with projects for cargo routes(transportation of iron ore, copper, bauxite, coal etc.).

At least 50 potential customers for rapid route projects ("city -airport", "city - city", "capital city -regional", "capital - capital");

3) Entering into preliminary agreements (contracts) of intent withpotential customers (at least 10) on implementation of urban andsuburban routes with a total cost of at least £2B.

Entering into a preliminary agreement (contracts) of intent withpotential customers (at least 10) on implementation of cargo routesfor transportation of bulk cargo with a total cost of at least £1B.

Entering into a preliminary agreement (contracts) of intent withpotential customers (at least 10) on implementation of rapid routesfor transportation of passengers and goods with a total value of notless than £5B;



4) Establishing legal framework for urban and suburbantransportation bulk cargo transportation, rapid transportation;

5) A number of structural and technological know-how (at leastthree for each mode) will be transferred to the category ofinventions and they will be filed for international patent application.

The working group "Marketing. Preparation of the customer baseand orders. Regulatory Framework. Legal Support" (Working Group4) will be aligned with the work of the other design bureaus.

Euroasian Rail Skyway Systems Ltd Business Plan /Timeline 60

Timeline

o31/12/2014 . Create R&D Testing Centre

The main purpose of the R&D Centre is to bringinnovative technology to blueprints.

31/03/2015 . Create Design Bureau Rolling stock forbulk cargo, passenger and rapid

Within 12 months from the beginning of thefunding working documents for rolling stock willbe prepared.

31/03/2015 . Create Design Bureau Transport Flyover

Within 12 months from the commencement offunding the working documentation on transportflyover will be prepared.

31/03/2015 . Create Design Bureau Terminals &Infrastructure

Within 12 months of the commencement offunding working documents for Terminals &Infrastructure will be prepared.

30/06/2015 . Marketing. Preparation of the Customerbase and Orders. Regulatory Framework.

Ready within 15 months of the commencementof funding.o

Euroasian Rail Skyway Systems Ltd Business Plan /Opportunity to Investors 61

Opportunity to Investors

Investment highlights

We are seeking an investment of £186M fora shareholding of 49%.

Exit Plan

Our exit plan is focused on two methods,IPO and a trade sale to a large institution orcorporations looking to expand into theinternational market

Finance Required

186,000,000 / Equity Offered

35%

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