Russia pledged more than $8 billion to upgrade its Far Eastern rail network, backing the development of links it said were crucial to the country's economic future. With growth in Asian markets such as China far outpacing that of their debt-stricken European counterparts, Russia wants to improve infrastructure in Siberia to support exports to countries where demand is greatest. Prime Minister Dmitry Medvedev said the state railway monopoly would get at least 260 billion roubles ($8.35 billion) to develop its Baikal-Amur Mainline (BAM) and Trans-Siberian routes by 2017 and suggested the money could come from national pension and welfare funds. "Without substantial investment in the Far East we will not achieve any of our key goals - in this case there's no magic spell," Medvedev told a conference on development in the country's Far East. Russia ships half its exports to Europe but, prompted by the region's debt crisis, wants to double the share going to Asia-Pacific, currently one quarter of the total. Finance Minister Anton Siluanov said financing the "ambitious" rail development project should also include private investment, increasing tariffs and issuing Russian Railways bonds. "The key issue is the need to develop the BAM and Trans-Sib lines ... we must involve all possible sources of investment," Siluyanov said at the conference. Russian Railways, which employs a million workers and runs 85,000 km of track, is on the government's list for privatization but its powerful head, Vladimir Yakunin, opposes a sell-off. Russian Railways believes that the upgrades would not be commercially viable and Yakunin, in remarks directed at the Finance Ministry, decried their "denunciatory" tone. "This 260 billion roubles is a shortfall that cannot be covered in any other way than from budgetary sources," Yakunin told the meeting in Yakutsk. The volume of traffic on the BAM and Trans-Sib routes in 2011 was 16.2 million tons, while demand is expected to reach 58.1 million tons by 2020, according to Russian Railways calculations. Russian Railways has estimated the total cost of revamping the two routes by 2020 at 918 billion roubles ($29.5 billion). The 4,324-km BAM line crosses Siberia and Russia's Far East to the North of the 9,289-km Trans-Siberian line, which has connected Moscow to the Pacific port of Vladivostok since 1916. (Reuters)