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Nov 11, 2015

"Further growth in passenger traffic is possible by using modern passenger rolling stock" says Belozerov

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Russia's State Duma has held parliamentary hearings on the "Status and Development Prospects for Long-Distance and Suburban Passenger Rail. Legislative Support." The hearings took place on 10 November 2015,

"Thanks to the timely actions of the federal and regional authorities in 2015, Russian Railways has for the first time almost achieved break-even financial results for the suburban commuter complex", said Oleg Belozerov, President of Russian Railways, who was speaking at the parliamentary hearings. "The suburban commuter rail companies were able to undertake long-term planning for their work, and together with Russian Railways are ready to execute all contracts to provide commuter transportation."

The participants in the parliamentary hearings noted that in 2015, the government adopted measures to maintain suburban rail services in most Russian regions, as well as to provide long-distance passenger transportation, including on routes with no alternatives (Tynda - Komsomolsk, Tomsk - Bely Yar etc.).

The demand for mass transportation to summer holiday destinations was met in full.

In addition, on routes where passengers were offered faster trains, the Company managed to increase significantly the amount of services provided.

According to the President of Russian Railways, the work on concluding agreements with the regions will be completed by 20 December 2015.

In regions which have shown positive financial results on suburban services, Russian Railways has been able to offer passengers new trains. Thus, the modern Lastochka electric train now operates between St. Petersburg - Vyborg, Moscow - Kryukovo - Tver, St. Petersburg - Volkhovstroy, St. Petersburg - Tosno, Yekaterinburg - Nizhny Tagil and Yekaterinburg - Kamensk-Uralsky. At the same time, the Company has cut travel times while retaining fares at their previous levels.

"Further growth in passenger traffic is possible, provided that we use modern passenger rolling stock. For 2016, Russian Railways has found an opportunity to increase purchases of motorised rolling stock to 232 units at a cost of about 15 billion roubles," said the Company President, explaining at the same time that 150 of the carriages to be purchased would be manufactured at the factory of Ural Locomotives for Lastochka trains and 82 carriages at the Demikhovsky Engineering Plant.

The hearing also noted that as part of the budget process, it was necessary today to make decisions that help to create equal conditions for all passenger carriers, with regard to both suburban commuter services and long-distance trains.

Among the possible options for government support to rail passenger transport, a zero rate of VAT on transporting passengers on suburban routes has proven to be effective. According to the participants at the hearing, in long distance transport even reducing VAT from 18% to 10%, as with air transport, would maintain the transport mobility of the population at the same level of 2015 while reducing the need for subsidies from the federal budget by 6 billion roubles, ensuring that the Federal Passenger Company would break-even and enabling the purchase of 186 cars made in Russia, of which 74 are double decker carriages, totalling 10 billion roubles.

The participants of the parliamentary hearings generally approved the measures conducted by Russian Railways with regard to passenger transport and developed recommendations to ensure the stable operation of passenger transport in 2016.

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