Siemens has announced that it is leaving the Russian market and ceases servicing its Russian projects. Among them are the iconic Sapsan trains that run between Moscow and St. Petersburg, but not only.

“It was not an easy decision, given our responsibility to take care of our employees and long-standing relationships with customers in the market in which we have been operating for almost 170 years,” the German company said goodbye to the Russian market with these words.

On May 12, Siemens announced its withdrawal from the Russian market “as a result of the war with Ukraine.” As early as March 2, the company was talking about the suspension of deliveries and work on new projects in Russia. However, on May 12, the company announced that it “has begun the process of curtailing its production activities.”

Siemens first appeared in Russia in 1851, supplying equipment for a telegraph line between Moscow and St. Petersburg. Moreover, the company also supplied equipment to the Soviet Union – before and after the Second World War.

In the new Russia, another project that connected Moscow and St. Petersburg, the Sapsan high-speed trains, became a milestone for Siemens.

Trains, the commercial name of which is Velaro Rus , are manufactured by Siemens for many countries. Trains of this family run on rails in Turkey, Spain and Germany. Velaro Rus was adapted to Russian conditions – first of all, cold weather – and in 2009 the line was launched.

The project was so important that on the day the Sapsan was launched – December 17 – the railway workers celebrated the Day of High Speeds.

“There are many good trains, but there is only one Sapsan. There are no other trains traveling at a speed of 200 kilometers per hour or more,” Dmitry Pegov, Deputy Director General of Russian Railways, said in an interview with Rossiyskaya Gazeta in 2019.

Russian Railways is currently using 16 Sapsan, Kommersant reported. In 2019, Russian Railways and Siemens signed the third contract for the supply of Sapsan and their maintenance for 30 years worth €1.1 billion, four out of 13 trains managed to arrive under it.

Siemens explained to the BBC that Siemens Mobility will also leave Russia entirely, including participation in existing joint ventures. Interfax reported, citing the company, that Siemens Mobility will terminate service contracts for maintenance from May 13. The company served “Sapsan”.

BBC correspondent Andrey Zakharov talks about how the Sapsan and SPIEF are connected, and why the news about the departure of the German company Siemens from Russia is symbolic

It happens that two random news together sound symbolic: on May 12, Siemens announced its withdrawal from Russia, and Roscongress clarified the procedure for the arrival of foreign participants to the St. Petersburg Economic Forum – yes, they are still planning to hold it.

It is clear that after the withdrawal of Siemens, the supply of “Sapsanov” will stop – and the localization of their production, despite all the talk, has not been established. And it is clear that if there will be foreign guests at SPIEF, then some “marginal” ones, like the “leading businessmen” of Iran, North Korea, Syria, or Eritrea, which unexpectedly supported Russia.

Peregrine Falcons and SPIEF are two symbols of the golden era of “Putinism”: the forum was a review of the Russian elite to the accompaniment of talk about blockchain and songs by Shnur, Duran Duran or Cure. And this elite went to the forum just on the Sapsan. Four hours instead of eight, soft chairs, silent running, polite guides, frail villages of the Novgorod region flicker outside the window, “Mikhalych, I’m just going to the forum, yes, yes, I’ll see you, of course, I hugged you.”

“I got a ticket for the next Sapsan, so jump in, ” a former St. Petersburg official who moved to work in the presidential administration and came home for the weekend told me. The German miracle train has shortened the travel time between the two capitals for people like him. In order to increase the number of Sapsan trains, commuter trains were canceled, overpasses were built (although the cars still stood at the crossings for an hour), this was an element of European life in conditions when reserved seat cars were still running somewhere in the regions.

Now this official put the letter Z on the symbol of the state institution entrusted to him, and he has not responded to my messages for a long time: I am a foreign agent. Does he understand the relationship between this Z and the fact that now they will try to replace the Sapsan with some kind of Samsam, but without a guarantee that it will appear soon, will drive fast and will not be dangerous for passengers at all? I think that he is now preparing a stand for SPIEF, which is paradoxical.

The Russian side will monitor the condition of the trains, by analogy with the situation with imported aircraft. According to Russian Railways, “maintenance of the Sapsan and Lastochka trains will continue under the current Russian legislation under the guidance and control of the Russian Railways holding.” However, this does not completely solve the problem.

“You can replace spare parts – with those that are in stock – you can even after some time find spare parts under the parallel import scheme when they run out. In extreme cases, you can disassemble one train so that it acts as a donor of spare parts – such But the problem is that the level of reliability that was originally – it will never be achieved, because the life cycle management systems – a set of IT solutions – have ceased to work, “explains Mikhail Burmistrov, General Director of INFOLine-Analytics.

According to Russian laws, there is an opportunity to import parts through third countries. Thus, on May 6, the Russian government published a list of goods for parallel import prepared by the Ministry of Industry and Trade. Siemens products are mentioned in several categories at once – in particular, “electrical machinery and equipment” and “boilers”.

Another notable project in which Siemens participated is the Lastochka electric trains. Russian Railways ordered their development from Siemens in the same 2009, when the first Sapsan was launched. The model of electric trains Seimens Desiro ML was taken as a basis. The trains were designed to carry fans during the Sochi Olympics. Later they were redistributed to other suburban lines.

“Lastochki”, as well as various types of mainline electric locomotives in Russia, are produced by a joint venture between Siemens and the Sinara group – Ural Locomotives.

Back in March, the company’s plans were more optimistic. Interfax, citing Ural Locomotives, reported that the company sees the further development of the high-speed electric train project in the production of new modifications, taking into account the possibilities of import substitution. According to the company, today the level of localization of the production of electric trains is 85%. It is not yet clear whether the release of “Swallows” will be continued.

At the same time, the whole project of new high-speed routes in Russia turned out to be a big question. Vedomosti, citing its sources, wrote that the Russian government intends to refuse to finance the high-speed railway project between Moscow and St. Petersburg at the expense of the National Welfare Fund. Without this source, it will hardly be possible to find funding for the project.

In total, about three thousand people work for Siemens in Russia (data from Reuters). Of these, about 450 people are engaged in servicing “Swallows” and “Peregrine Falcons” ” in the field ” – there are basic and additional depots in Moscow, Yekaterinburg and Adler.

What will happen to them is not yet clear. “Now we are working on detailed plans and will support our employees to the best of our ability,” Siemens explained in response to a BBC question about the prospects for Siemens Mobility staff in Russia.

“The most key problem associated with the departure of Siemens from Russia is not a question of joint ventures, joint ventures in the field of electrical engineering, in the production of gas turbines, in the field of railway technology – this is plus or minus solvable. The problem is that the hardware can be replaced , but you cannot replace the management system, IT solutions,” says Mikhail Burmistrov.

The automation system, life cycle management system, complex sensors – this is what will be the most difficult to replace, the expert notes.

Siemens in Russia is really engaged not only in transport. The company had projects in various fields – industrial automation, building automation and security, energy, healthcare and others. Some of them do not leave Russia completely.

Siemens Healthineers AG, a medical equipment company, said it would remain operating in Russia. “We do this in strict accordance with the law. The current sanctions are not directed directly at the healthcare sector, since access to medical care is one of the basic human rights,” the company said in a statement (quoted by TASS).

Leasing company “Siemens Finance” plans to remain on the Russian market, but will change owners – negotiations are underway to change ownership.

In 2020, as a result of a spin-off (spin off of an organization), Siemens Energy was formed (as of the end of November 2021, Siemens was the largest shareholder) – it is responsible for energy-related projects. This company is one of the main suppliers of power equipment to Russia. In particular, the company owns 65% in a joint venture with Power Machines – Siemens Gas Turbine Technologies (STGT). The company is also involved in renewable energy projects in Russia and owns Siemens Transformers.

Siemens BBC did not explain whether Siemens Energy plans to leave the Russian market. A source familiar with the situation told Kommersant that Siemens Energy is considering a management buyout of the company. So the company will be able to continue its activities in the country under Russian leadership.

However, on May 11, Siemens Energy CEO Christian Bruch said during a conference call that if the company decides to leave Russia, it will do so in an “orderly manner”, and is now looking for “meaningful solutions” for its 1,000 employees in Russia (quotes from ” Interfax”).

In 2017, Siemens and its energy products were at the center of a scandal. Several turbines that I bought from Technopromexport for facilities in Taman ended up in the Crimea. This contradicted the sanctions regime imposed by the EU after the annexation of Crimea: European companies are prohibited from supplying gas equipment to the peninsula.

Technopromexport, which builds power plants in Crimea, said that the company purchased four turbines on the secondary market and then upgraded them at Russian factories. As a result, the EU imposed additional sanctions, and Siemens sued a number of Russian companies.

The court then noted that the implementation by Russian legal entities (which include Siemens Gas Turbine Technology) in Russia of the restrictions and prohibitions imposed by the European Union “directly contradicts the fundamentals of the rule of law of the Russian Federation and damages the sovereignty of the state.”

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