In 2001, Russia’s Ministry of Railways embarked on a comprehensive Railway Structural Reform Programme developed in cooperation with the government and published as Decree No. 384 on May 18, 2001.
The Reform Programme sets out strategic priorities for the rail industry up to 2010 and beyond with the aim of improving the efficiency and profitability of rail services in Russia, encouraging investment for modernisation and creating an effective holding company.
Preparation (2001-2002) - completed with a one-year delay in 2003:
- Ministry of Railways is renamed the Federal Railway Transport Agency (FTRA):
- FTRA retains regulatory powers over railway transport, including the implementation of industry reform, the preparation of normative and legal acts and the licensing of federal railway activities.
- The Open Joint-Stock Company Russian Railways (JSC RR) is created as the
corporate successor to the Ministry of Railways in September 2003 by Decree No.
- Russian Railways assumes all assets and operations of the former Ministry of Railways.
Asset unbundling along functional lines (2003-2005) – completed:
- Formation of multiple subsidiaries for:
- passenger services
- non-core businesses
- selected freight services such as intermodal and refrigerator transportation
- Phasing out cross-subsidies from profitable freight operations to passenger services
- Russian Railways
- retains its monopoly on infrastructure, locomotives and most freight businesses
- continues to be the main owner and provider of locomotives and rail cars in Russia.
Increased Competition (2006-2011 and beyond) – in progress:
- Increased competition from private rail operators through partial privatisation
of Russian Railways and/or some of its enterprises:
- Initial Public Offerings (IPOs) and/or privatisation of local passenger, repair & construction, and research & development subsidiaries
- Sell operating licenses for selected passenger services to independent operators.
Phase III is subject to modification, depending on global economic, financial and industry conditions.
Infrastructure still regulated the Government after Reforms
- National railway infrastructure is technologically complex and comprises all facilities and structures that enable seamless usage of the national railway system, e.g. tracks, power supply, communication networks, traffic management systems; and provide an integrated environment for the conduct of railway transportation operations
- Railway infrastructure facilities are component parts of the railway assets belonging to Russian Railways under its charter capital
- State control and supervision of national railway usage is ensured by the Federal
Law on Management and Disposal of Railway Assets:
- Russian Railways has been granted the use of the locomotive and railway carriage fleets of the former Ministry of Railways
- Infrastructure will be unaffected by reform activities and will remain in government ownership under the control of Russian Railways.