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Nov 22, 2013

Russian Railways to spend 5 billion roubles on rolling stock for long-distance passenger transport

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On 18 November 2013, the Board of Directors of Russian Railways approved a decision to increase the Company's stake in the charter capital of the Federal Passenger Company.

According to the decision, Russian Railways will acquire ordinary shares in the amount of 5 billion roubles in an additional issue by the Federal Passenger Company through a purchase/sale agreement. Payment will be made from funds allocated for the purpose from Russian Railways' net profit from the Company's 2012 results.

Russian Railways' contribution to the Federal Passenger Company's authorised capital will be used for the acquisition of 145 passenger sleeping and ordinary carriages.

Due to shrinking government subsidies, the Federal Passenger Company feels the need to update its fleet of passenger carriages and to receive compensation for decommissioned carriages on the expiration of their service life. A lack of sufficient passenger carriages could lead to a reduction in the number and quality of passenger routes at regulated tariffs, including the cancellation of unprofitable, but socially important trains.

Thus, at the end of 2012 and the beginning of 2013, depreciation of Federal Passenger Company passenger carriages was 65%. The average age of carriages is 19 years. During the period from 2013 to 2015, it is planned to write off over 2,000 open-plan carriages. The fleet of open-plan carriages at the beginning of 2014 will be 8,427 units.

In order to update the passenger fleet, in 2013 it is planned to purchase 305 passenger carriages worth more than 20.385 billion roubles.

These include 145 carriages for 5.574 million roubles - for use in the regulated segment, including 72 open-plan carriages for over 2.505 billion roubles and 73 carriages with a centralised power supply (second-class open-plan and interregional carriages classes 1 and 2) worth more than 3.068 billion roubles.

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