OREANDA-NEWS. November 10, 2011. The Presidium of the Russian Government has considered the issue "On projects of the Investment Programme and Financial Plan of Russian Railways in 2012 and the Planning Period of 2013 and 2014", reported the press-centre of RZD. 

As the President of Russian Railways Vladimir Yakunin noted afterwards, the Company’s total investment programme over the next three years is planned to reach 1.1 trillion roubles, including 411.6 billion roubles in 2012."We have always insisted that investing in infrastructure is the best investment for public money. Today, this view was echoed for first time by the Russian government.

The Prime Minister expressed the need to accelerate the work to develop a strategy for high-speed services in Russia, and gave a direct order to the Russian Government, the Ministry of Transport and Russian Railways to that effect. I think this is evidence of the government’s focus on creating rail infrastructure in the country’s interests," said the President of Russian Railways.

According to Yakunin, the decision to provide state support to Russian Railways amounting to 40 billion roubles, including a 6% indexation of rail freight charges from 1 January 2012, will greatly facilitate the implementation of a number of innovative projects.

These include faster passenger services between Moscow - Adler by 2014 and between Rostov - Krasnodar by 2015, the implementation of a joint project between Siemens AG and the Sinara Group to deliver and localise the production of high-speed electric rolling stock, faster development of transport infrastructure in Russia’s South and Far East, the development of intermodal shipments from Kazan Station - Kazan International Airport and the much greater utilisation of the railway infrastructure of the Moscow transport hub.

Thanks to the expansion of the track facility repair programme to 10,400 km, the Company will for the first time in recent years reduce the length of track in need of repair. In addition, the Company will also purchase nearly 400 locomotives and 460 units of motorised railcar rolling stock.

However, in contrast to previous years, in 2012 and subsequently, Russian Railways will have virtually no internal resources to finance its investment programme by selling shares in its subsidiaries.

To implement its plans, Russian Railways will therefore have to increase its loan portfolio substantially, borrowing an average of more than 100 billion roubles a year. At the same, however, investor confidence in the implementation of the Company’s loan and investment policy should be ensured by the formation of long-term government approaches to tariff setting, which provides a guaranteed return on investment in rail infrastructure, or by state support for the development of the railways.

The President of Russian Railways said that the underfunding of transport infrastructure could lead to serious damage to Russia’s economy as a whole, with losses to the budget system amounting to a multiple of the financial investment required.

The Company’s financial plan for 2012-2014 forecasts growth in freight shipments by an average of 3% annually, but also takes into account the current uncertainty and high volatility on the global financial and commodity markets.

Even in these difficult circumstances, however, the Company has assumed greater obligations, searching for and finding the maximum reserves and setting itself the serious tasks of defining the parameters of work and achieving financial balance.