The Russian government has considered the investment program and financial plan for Russian Railways, 2014-2016

On Thursday, the Russian government examined the issue of “A Draft Investment Program and Financial Plan for Russian Railways in 2014 and the Planning Period of 2015 and 2016.”Changing macroeconomic conditions and a significant slowdown in industrial production in 2013 resulted in a 3.1% reduction in freight when compared with 2012, as opposed to the previously planned growth. A similar trend was observed for next year: in accordance with the updated forecast of the Economic Development Ministry, shipping is projected to increase in 2014 by only 0.4% according to 2013 forecasts.

“After the Russian government decided to freeze tariffs in 2014 to ensure that the company broke even, the Board was forced to take additional measures to further reduce costs by 84.9 billion rubles and increase revenue receipts,” said Vladimir Yakunin at a Russian governmental meeting.

These measures, together with the proposed government support, will ensure a positive financial result in 2014.

At the cabinet meeting, it was noted that the targets for the reduction of road overhaul in 2014 will inevitably lead to up to a 17% increase in areas with due repairs, and in the subsequent period it will be necessary to compensate and make full repairs.

“Reducing the cost of restoring infrastructure will reduce the reliability of the technology. It’s not critical at the moment. We understand the responsibility we are taking, but nevertheless certain measures have to be compensated for in the following years in order to ensure the level of safety”, said the president of Russian Railways.

The total investment program of Russian Railways in 2014-2016 will be 1.2 trillion rubles, including 395.6 billion rubles in 2014, 415.2 billion rubles in 2015, and 438.4 billion rubles in 2016.

The number of investment projects carried out on behalf of the state in the next three years will include the development of the eastern testing grounds (BAM and Transsib), measures to develop the railway infrastructure of the Moscow transport hub, developing the Mezhdurechensk-Taishet site, and building a bypass for the Krasnodar hub. A total of 418 billion rubles is planned for the implementation of public projects by the state, as well as equity and debt of the company, over these three years.

Also, as part of the investment program, over 9 300 km of railways, 660 km of overhead line, and around 245 km of automatic block signaling will be reconstructed; 1529 new locomotives are being purchased, including 629 units for 2014 and 450 units for 2015 and 2016 .