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Oct 11, 2015

"We need a balanced approach to determine the development strategy of the rail freight market" says Oleg Belozerov

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Oleg Belozerov, President of Russian Railways, participated in a meeting to discuss the draft version of the Targeted Model of the Rail Freight Market until 2020, which was held in Moscow on 9 October 2015.

The meeting was attended by board members of Russian Railways, members of the Consumer Council on the Activities of Russian Railways, representatives of Russia's Ministry of Economic Development, the Federal Antimonopoly Service of the Russian Federation and the Expert Council of the Government of the Russian Federation.

The meeting noted that there was an urgent need to find mutually balanced solutions that will ensure that customer needs are met and preserve the railway industry's pace of development.

According to the President of Russian Railways, it is necessary to preserve the integration of infrastructure and transport activities at Russian Railways in the Targeted Model of the Rail Freight Market until 2020.

"We now need a balanced approach when determining the rail market's development strategy. First of all, we must take into account the interests of our clients - the shippers and the economy as a whole. Independent studies are available, as well as international experience of different private carriers using a common infrastructure. We need to study all this very carefully. We cannot allow an increase in the load on transport, or, even more dangerous, a division of work technology in rail transport," said Oleg Belozerov.

According to Russian Railways, a cautious approach to the development of competition in the railway transportation business is required because of the complexity of organising a single technological rail transportation process when multiple carriers, with the relevant locomotive fleet and logistics, are carrying out simultaneous operations on the railway infrastructure.

"Many EU countries are trying to retain the integration of infrastructure and transport activities, such as Germany, Lithuania and Latvia. In early 2015, France returned to the model of a vertically integrated railway group after 18 years of experimenting with the separation of infrastructure and transport activities," said Salman Babayev, Vice-President of Russian Railways.

In addition, the participants agreed on the need to reassess reforming the tariff system and introducing long-term rates in the Targeted Model of the Rail Freight Market.

They also noted the need to align the competitive conditions of freight transport by road, water and rail. It is proposed to solve this problem by making amendments to the licensing conditions and taxation and by establishing environmental standards and rules governing the operation of vehicles.

The meeting resulted in an agreement to establish a working group with the participation of Russian Railways, the Consumer Council on the Activities of Russian Railways, representatives of the Ministry of Economic Development, the Federal Antimonopoly Service of the Russian Federation and the Expert Council of the Russian Government. The aim of the working group is to conduct regular meetings and work out coordinated decisions on the development of the railway transport market.

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