January 15, 2021 20:08

Gaidar Forum 2021: Russian Railways. Talking about the Future

Gaidar Forum 2021: Russian Railways. Talking about the Future

How is the importance of railways to the Russian economy changing? Will it change in the future, and how? Is the tariff policy obsolete and are subsidies needed? The discussion"Railroads. Talking about the Future", held within the framework of the second day of Gaidar Forum, was focused on the prospects of railways development in Russia.

The pandemic year of 2020 caused a massive disruption of business chains, so it was necessary to find new supply options and in some cases new transportation routes. The leading role in this search for a way out was played by the railways, which are the main transport artery for Russia. Another important aspect for the Russian economy was the fact that JSC "Russian Railways" is one of the largest customers in the country that provided a large amount of orders for companies associated with the railways. On the other hand, the need to change the tariff policies came to the fore, the principles of these policies preserved since the Soviet times.

Among the participants in the discussion were Oleg Belozerov, CEO and Chairman of the Management Board of JSC Russian Railways, Maksim Reshetnikov, Russian Minister of Economic Development, Dmitry Komissarov, Chairman of the Board of Directors of JSC Transmashholding. Andrey Kaukin, head of the Industry Market Research Center at RANEPA, moderated the discussion.

Maksim Reshetnikov told all those present that issues related to tariff policies were being actively discussed last year, and the main question was whether to treat "Russian Railways" as an independent profit center or as part of the basic infrastructure working for the national economy as a whole.

"We're probably past that fork in the road. Of course, the main task of Russian Railways is to ensure overall economic growth. At the same time I would like to stress that this is a commercial company with a capital and borrowings," said the Minister.

According to Mr Reshetnikov, the share of unprofitable cargoes, their transportation costs covered with revenues from other cargoes, has increased. This trend destabilizes the situation, and the issue must be resolved this year, the Minister said. Mr Reshetnikov spoke out against the plans to no longer use cross-subsidies, adding that production entities were integrated into the system under a different logic that did not provide for full recovery of transportation costs, and such a drastic move could cause upheaval.

Oleg Belozerov noted that the current tariff system does not reflect the current realities and does not suit any of the parties involved in the discussion of possible changes to the tariff policy.

"There is a general dissatisfaction. Why did this happen? The tariff system was formed in Soviet times based on the premise that railways have always been a ministry. A ministry is a body of executive power. Cross-subsidization could be performed within a state agency, it could be balanced within a ministry. When Russian Railways became a joint-stock company, the business conditions changed, because a joint-stock company is created to make a profit. On the other hand, we have the owner, that is the Russian Federation, and we will fulfill all the tasks set before us by the government as the owner," he said.

According to the head of Russian Railways, in the future tariffs should not be calculated on the basis of distance, but differ depending on specific directions. At the same time, he expressed confidence that the government will make a balanced decision after the issue has been discussed with all the stakeholders.

In his turn Dmitry Komissarov said that, based on the experience of previous discussions, he has no doubt that all the questions and problems, voiced by the parties of negotiations, will be left unattended by the government.

He also said that railways are a non-alternative transport for a substantial part of Russian producers, and for the eastern direction is also a scarce and "not so easy to distribute" resource.

"There is, by and large, no serious alternative to the railroad, this determines its future," he believes.

The Transmashholding representative noted the positive impact of railways on the Russian economy in 2020, when Russian Railways acted as a customer, providing work for partner companies. He called it a "huge contribution" to the Russian economy.



Photographer: Mikhail Tereshchenko / TASS

The Gaidar Forum “Russia and the World After the Pandemic” will be held on January 14 and 15 at the Presidential Academy. The Forum will traditionally open the annual business agenda of Russia. In 2021, this large-scale event will be held in a hybrid format, both online and offline.

This time, the main discussion track will be social and economic transformations that have occurred in the country and the world as a result of the COVID-19 pandemic. The expert discussions will be focused on the national and global development goals and the search for practical solutions to the most urgent challenges of today. The Forum’s participants include ministers from the Russian Government, members of the Federal Assembly, governors of the Russian regions, largest world experts, representatives of foreign states.

The general partners of the Gaidar Forum are Gazprom PJSC and Gazprombank JSC.

The strategic partners are Russian Railways OJSC, Johnson&Johnson, ACIG Group, Novartis.

The partner of the forum is MasterCard, Russian Direct Investment Fund (RDIF)

The discussion partners are Magnit, Pepsi, Huawei, Coca-Cola, AstraZeneca, Takeda, EY.

General media partners: TASS, Business FM, RIA Novosti, RBC. Strategic media partners: Interfax, Rossiyskaya Gazeta, Kommersant Publishing House, RIA FederalPress, Invest-Foresight magazine. Main media partners: Anews, News.ru, lenta.ru. International media partners: Russia Today.

Media partners: PRO Business TV channel, AEI PRIME, Polit.ru, Strategy magazine, Public Administration magazine, Ekonomika i Zhizn newspaper, Econs portal, Finam, Bankovskoye Obozreniye magazine, Parlamentskaya Gazeta, Snob media project, Echo of Moscow radio station, Nauchno-Obrazovatelnaya Politika Telegram channel.