"We must create the economic conditions which enable manufacturing industry to work more actively," says President of Russian Railways Oleg Belozerov
Oleg Belozerov, President of Russian Railways, has taken part in an extended session of the Ministry of Economic Development of the Russian Federation at which he reported on the Company's financial balance and the improvement of the freight transportation market model.
"The end of last year was very active in terms of operational costs and increased efficiency. This work was carried out jointly with the Ministry of Economic Development, and we reached a positive result,' said Oleg Belozerov in his address. "In particular, the Company reduced its transportation costs by almost 40 billion roubles and held the increase in transportation cost to just 7.1%, which is much lower than the annual rate of inflation. One of the key performance indicators, labour productivity, increased by 4.8% in 2015."
"The Company's activities focus not only on the internal search for reserves, but also on stimulating the development of the economy's productive sectors. We understand that if there is more freight, we stand to gain more revenues, and, accordingly, we must create those conditions in the wider economy that will facilitate more active work for these sectors," said the President of the Russian Railways.
In accordance with a government decision, the effective tariff freight rate should not exceed 7.5% based on the results in 2016, whereby in the first quarter, the increase in the tariff rate compared to the same period in 2015 amounted to 3%, which will reduce the burden on shippers to 45.5 billion roubles and thus relieve the economy as a whole.
"The key question is tariff regulation. In cooperation with Russia's relevant executive bodies, the Company is involved in developing a concept for a new price list for freight transportation. We are still following a document which was drawn up 13 years ago, and have come to the conclusion that it is necessary to improve it," said Oleg Belozerov. "The main tasks that the new price list will have to solve are to exclude cross-subsidising the transportation of some types of goods by others, as well as guaranteed compensation of the costs to the carrier and infrastructure owner at least at the level of cost. At the same time, Russian Railways will continue actively to apply a flexible tariff policy to attract new customers."
An important theme that the Company President raised in his speech was an analysis of the freight transport market.
"The model of the market for freight transportation which has developed in recent years has very serious sustainability risks. On the market of operating freight wagons, the daily rates for a wagon are very low and there is a surplus wagon fleet, which both generates and entails a number of problems," said Oleg Belozerov. "In these conditions, attracting wagons and managing the wagon fleet needs to be further improved. A balanced result can be achieved by, among other things, using competitive mechanisms on public platforms. Russian Railways will continue to work together with the government to find a solution to this problem."
Separately, the question was raised about the feasibility of separating the infrastructure from the transportation side, as well providing private shippers with access to the public transport infrastructure.
"We are open to discussing this issue. However, we believe - and would like to thank the Ministry of Economic Development for supporting this position – that we should not violate the basic principle of railway transport operation – which is to ensure the stability, reliability and safety of rail services," said Oleg Belozerov.