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Russian Railways State Support
September 23, 2015 00:20


The Ministry of Transport of Russia supports the indexation of the freight rates of Russian Railways by 10 percent in 2016 with subsidies in the amount of 35-40 billion roubles.

This was reported by RIA “Novosti” with the reference to the statement of the Head of the agency Maksim Sokolov. According to him, these figures will still be reviewed. The Ministry of Transport will bridge positions with the Ministry of Economic Development and the Federal Antimonopoly Service (FAS).

On September 15 it was reported that FAS opposed the multibillion government subsidies for indexation of the freight rates of Russian Railways by 10 percent. According to the Head of the Service Igor Artemyev, the antitrust regulator has “a negative attitude even towards these proposals”. Initially Russian Railways announced a 17 percent indexation.

On September 10 “Vedomosti” reported that the financial plan of the railway monopoly provided the indexation of rates by 10 percent and 40 billion roubles of subsidies for “maintaining financial stability”, 36.5 billion roubles would be allocated to cover the expenses related to the commuter passenger transportation.

The publication noted that the total amount of state support, including the money of the National Welfare Fund for co-financing of investment projects, made up 173.6 billion roubles. The Ministry of Transport spoke about the need for providing subsidies in the amount up to 75 billion roubles to Russian Railways in 2016. According to the financial reports of Russian Railways for the first half of 2015, the net profit of the company under Russian Accounting Standards increased almost eightfold - up to 18.2 billion roubles.

In 2014 the then Head of the monopoly Vladimir Yakunin asked the Russian President Vladimir Putin to help Russian Railways, for the company was threatened by the loss of 100 billion roubles at the year end. He spoke about the indexation of railway freight rates above inflation level (by 10 percent instead of 6) and the allocation of additional 45 billion roubles from the budget.

As a result, the government satisfied the need of Russian Railways: the company managed to obtain an additional increase of rates and 30 billion roubles of state support.


Author: Anna Dorozhkina

Tags: Russian Railways     

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