Development of the transport infrastructure is one of the priority tasks of the state activities. The main purpose of the developing the republic's transport infrastructure is creation of conditions for improving the social and economic situation by lowering the by-costs of transportation in the territory of the republic and country, improvement of quality and safety, meeting the growing requirements of the economy of the Republic of Kalmykia and Russia in transport services.

The main tasks for the development of the transport complex are:

• Integration of the transport complex into the world transport system, construction in the territory of the republic and whole Russia competitive international transport corridors with the maximal use of the advantageous geographic position of the Republic of Kalmykia;
• Guaranteeing secure functioning of the transportation and lowering the negative effect on the environment to the level of international norms.

The same importance is given to another task, substitution of imports. Russia imports the total annual amount of $3 million of transportation services. Part of these sums may be invested into the development of internal transport services to substitute the imported ones with the same quality and against the lower tariffs. Substitution of imports provides redirection of 5-6 % of goods flows through the Russian transportation system and gives immediate economic effect in the other sectors by lowering the costs of transportation.

Having an advantageous geographic position, having the approaches to the sea and systems of space, air and naval navigation Russia holds a unique opportunity to participate in the international transit. Protection of Russian national interests and prevention of isolation requites connecting the Russian transport system to the international flows by creating the routes to the countries of Middle and Central Asia through ferry lines in the Caspian Sea, development of international airlines, railroad and automobile routes.

As the result of separation of the transport infrastructures of the republics of Central Asia and the military and political instability in the North Caucasus Russia found itself cut off from the secure and economically effective routes to Iran, Pakistan, Afghanistan, India and countries of Persian Gulf.

The problem of the Black Sea - to - Mediterranean streams is gradually becoming more and more serious. It is necessary to project possibilities of shifting the main transport weight in the conditions of growing economic importance of the East.

The growing need for intercontinental transportation of the republics of Central Asia as well as the European and Asian countries condition the development of the new transport routes.

The transport infrastructure development program includes:

• realization of the transit potential of the republic and Russia;
• development of the cargo aviation;
• development of the railroad infrastructure and the competitive sector of railroad transport;
• development of the system of motor roads and highway infrastructure;

The transcontinental transport corridor "North - South" is the main direction from India through Iran, Caspian Sea, European part of Russia to Europe. The Caspian Sea is the only "gateway" between the transport systems of Europe, Asia and Middle East.

Analysis of the situation in the Russian Caspian regions (political, economic, geographic, climatic, etc) allows to state that there is a necessity in employing the most optimal route to the countries of Middle East, Persian Gulf through the Russian coast of Caspian Sea, Port Lagan (Republic of Kalmykia). The development of transport communications and transcontinental railroad and naval corridor through the Republic of Kalmykia and the construction of sea port in Lagan will allow not only connection of Baltic countries and Russian railroads with Iran, but also allow to advance to Pakistan, India, Arab Emirates, Saudi Arabia, Kuwait and Iraq. Such a ferry line will greatly influence the solution of social and economic problems in all the Caspian states and Russia.

Building of the transcontinental corridor through the territory of Russia is also an additional diplomatic asset of the country.

The transport corridor will connect the automobile and railroad routes to meet the needs of the clients in mixed multi-modal transportation between Europe, Middle East and Asia, and also enable delivery of cargo without intermediate stops, higher degree of security for cargo and passenger routes and reduction of delivery terms and costs. The delivery of freight from the Middle East countries to the Far East will be facilitated by 1.5 times, the costs will reduce by 40 %.

The other priority task in the development of the transport infrastructure is the development of international airlines.

The main tasks of the state policy in the field of aviation are:

• support of the domestic airline companies on the international markets by drawing the favorable international airline agreements;
• system measures on complex development of airports, creation of the investment conditions for the development of the ground technical base of the airports.

The railroad network of Russia on the main directions has certain reserves to meet the growing needs of the economy and population in transportation. At the same time it is proposed to broaden the transportation offer by expanding the railroad network to the ports on Caspian Sea and border crossings, prospective in terms of export potential, lines providing the most transport amounts of raw materials, agricultural production.

The development of the railroad system in this direction will increase the profitability of transports on the basis of tariff optimization and guarantee damageless and secure passenger and freight routes.

It is planned to build a large transportation center with the construction of railroads: "Lagan - Ulan Khol" length 42 km, capacity over 13 million tons per year, "Ulan Khol - Elista" length 240 km and "Lagan - Ulan Khol - Volgograd " length 472 km.

The line "Lagan - Ulan Khol - Volgograd" will be laid on the locale with simple relief - there will be no need to build artificial technical structures.

Running of the railroad "Lagan - Elista" will promote the rise of the republic's economy and give Russia additional means of influencing the countries of Caspian region, Central Asia, create conditions for turning Russia into a key element of the strategic route between Europe and Asian and Pacific countries.

In all the main indicators of the development of automobile roads Russia is considerably behind many countries. The condition of road infrastructure is poor. Low capacity of the federal highway system is becoming more and more apparent, especially at the approaches to the main transportation centers.

It is proposed to take the following priorities in the development of motor roads system:

• creation of the system of automobile highways and roadways to the largest transportation centers (naval and river ports, airports, railroad stations) within the most important international and regional transport corridors; integration of the national system of automobile highways to the European and Asian systems with the securing of adequate Russia's position in the international transit flows;
• creating conditions for uninterruptible and secure procession of transportation means with the special account to the environment requirements and safety.
• creating the corresponding interrelation of the length and capacity of federal and territorial roadways and the requirements of territorial connectivity and defense of the country.

Thus, the coordinated development of the transport infrastructure will enable integration of the European and Asian transport systems for effective conveyance of passengers and freights through the national borders.

Rational interaction between the different types of transport in the intermodal transportation chain optimizes the transportation process, increases the quality lowers the tariffs of passenger and freight conveyance, reduces by-costs in the final cost of goods.

Powerful transit potential of the country will become an essential contribution into the growth of the Russian national product with the growth of the transported amounts and effect in other sectors of economy. The transit rent will become an important source of external Russia's income. By 2010 the amount of external commercial freights of Russia will sum up at 645-655 million tons, the amount of transit freights will reach 58-60 million tons. The international conveyance of passengers will total at 20-22 million men.

The oil pipeline Tengiz-Novorossiysk of the Caspian Oil Pipe Consortium is build through the territory of the Republic of Kalmykia to transport the raw oil from Tengiz and other oil extracting sites in Kazakhstan to the terminal on the Black Sea coast near Novorossiysk. Kalmykia's labor and technical resources were employed at the construction of the pipeline in the territory of Kalmykia (275 km).

During the life time of the pipeline (40 years) the federaland regional budgets of Russia shall receive $23.3 billion, of which the Republic of Kalmykia shall receive approximately $1.8 billion.

Thus the realization of the pipeline project is becoming a powerful backup for the development of the republic's and Russian economies.