JSC "Russian Railways" is one of the largest transportation companies in the world and is one of the largest enterprises in Russia.
The company was created by the privatization of the property of the federal railway transport carried out in accordance with the legislation of the Russian Federation in 2003. In the process of privatization a single economic entity was created by withdrawing the property from the federal organizations of railway transport and its entry in the share capital of JSC "Russian Railways". The sole company’s shareholder is the Russian Federation. On behalf of the Russian Federation the authorities of the shareholder are implemented by the Government of the Russian Federation.
Russian Railways provides a full range of services in areas such as freight transportation, provision of locomotive traction and infrastructure; repair of rolling stock; passenger transportation in the long-haul and suburban traffic; container shipping, logistics, engineering services; research and development activities; as well as other activities.
The company carries out projects for the construction of railways and the development of infrastructure in Serbia, Mongolia, North Korea, Indonesia, Austria and Slovakia, fully complying with its obligations under the concession management of the railway system in Armenia. The company has interest in the implementation of joint infrastructure projects in Vietnam, Ecuador, Brazil, Oman, Ethiopia, Iran, India and several other countries. In addition Russian Railways ensures effective development of rail and intermodal freight transportation in the Euro-Asian communication, including projects done in cooperation with partners in Kazakhstan, Belarus, Finland, Slovakia, Germany and China. Scientific and technical cooperation with leading companies in the field of transport engineering from Germany, France, Spain and other countries are actively developed - localization of modern rolling stock is done in Russia. Priority area is to strengthen cooperation with the railway administrations and companies of "Space 1520" - the main partners of Russian Railways for freight and passenger traffic.
The mission of Holding "Russian Railways" is the effective development of competitive transportation business on domestic and international markets, the core of such development being effective operations as the national rail carrier of freight and passengers, and the owner of the railway infrastructure of common use.
The target for the Russian Railways is to become the largest in the country and in the top three of pan-Eurasian transportation and logistics vertically integrated holding company, the rising cost of which will be achieved by improving internal efficiency, the entrance to the high-margin market segments of freight and passenger traffic, the development of new services, geographic diversification.
In order to combine expertise in the organization of the transportation process in the field of logistics activities, including the organization of cargo traffic, a range of services for cargo handling (terminal-handling activities, related services) and work with clients, a transport and logistics business unit, which includes specialized subsidiaries and affiliates, subsidiaries and business units, was created in the Holding "Russian Railways".
- Natural monopoly, which owns the world's third-longest rail network (more than 85,3 thousand km on December 31, 2014) and related infrastructure in Russia.
- Dominant position in freight transportation segments, as the world’s third largest railway in terms of freight turnover.
- Owns and operates nearly all of the locomotives in Russia, consisting of about 13 990 units as at December 31, 2014.
- The Company together with its subsidiaries is the largest Russian owner, operator and lessor of freight rolling stock of about 242,2 units as at December 31, 2014.
- One of Russia's largest companies in terms of assets: in accordance with the IFRS Statements of the company their value was estimated at about RUB 4.4 trillion (about USD 79.2 billion) as at December 31, 2014.
- One of the largest single contributors to Russian GDP, according to preliminary estimates was about 1.4% of the GDP in 2014; revenues for all activities in 2014 amounted to RUB 1,401.7 billion (in accordance with the IFRS Statements).
- The largest commercial employer in Russia with about ca. 835.8 thousand employees in Holding as of the end of 2014.
- A responsible corporate citizen with ca. RUB 104.8 billion investment into social development projects in 2014.
The Russian Context
- Because of the country’s huge territory and vast natural resources, a highly developed railway system is vital to Russia - rail is the key transportation mode in Russia with over 86% of the total volume (excluding the pipeline).
- Many of Russia’s natural resources are in remote, harsh and sparsely populated regions of Siberia and the Russian Far East that have underdeveloped road infrastructure and are far removed from the main population centres in European Russia.
- Railways connect 79 of Russia’s 85 regions and provide services to most major cities, having a direct impact on growth, industrial development and regional integration.
- Much of the population relies on the railways because of the limited road networks, huge distances and the remoteness from large parts of the country.
The Group’s strategic objective is to implement the railway development strategy according to the Strategy for Developing Rail Transport in the Russian Federation up to 2030.
The basis of corporate strategy is determined by the objectives set by the Government of the Russian Federation in the forecast of socio-economic development of Russia until 2030.
The below complex ambitious goals are set by the strategic documents, approved by the state level:
- forming of a common transportation area in Russia on the basis of a balanced advanced development of effective transport infrastructure;
- securing accessibility and quality of freight transportation and logistics services to meet the development needs of the country's economy;
- securing accessibility and quality of passenger transportation services in accordance with the social standards;
- integration into the global transport community; realization of transit potential of the country;
- improving safety of the transport system;
- reducing the negative impact of the transport system on the environment.
The Board of Directors of Russian Railways is committed to the establishment of a framework of corporate governance and maintaining high standards of governance throughout the Company and its subsidiaries.
Effective management contributes to the successful implementation of the reform on the railway transport.
The company is constantly working to improve the corporate governance system in line with international standards and gives priority to the interests of the shareholder and partners, improvement of the efficiency and speed of management decision-making, as well as increasing the transparency of its activities.