Russian Railways to cut 2016 investment plan by 13%

By bne IntelliNews September 9, 2015

Russian Railways' investment programme for 2016 is worth RUB430bn ($6.25bn), TASS reported on September 8, citing the state company's financial plan. However, its   budget prepared in November 2014 put the investment programme for next year at RUB486.6bn, indicating that the decrease in capital expenditures could reach 13.2%.

The investment programme for 2015 grew from RUB414bn to RUB427bn thanks to the implementation of infrastructure projects. The company said earlier that its priority projects for 2015 include the development of the Baikal-Amur and Trans-Siberian railways and the Moscow railway junction, the removal of infrastructural constraints on the entire railway network, and transport security.

First Deputy Transport Minister Oleg Belozerov became the new president of Russian Railways in August, taking over from Vladimir Yakunin. Belozerov is seen on the market as effective manager able to complete the company's reform started under Yakunin.

Russian Railways' financials have been deteriorating for several years. At the end of 2012, the company's cargo turnover started to decline, falling in 2013 by 2.8%, and by 0.8% in 2014 to reach 1.22bn tonnes. Profits have been steadily falling since 2009. In 2014, Russian Railways reported a loss of RUB99.32bn. Additionally, the monopoly started to ask for more subsidies every year, receiving RUB30bn in 2015 and requesting RUB140bn for 2016.

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