MEETING on January 29, the Cabinet of the Russian Federation government headed by Prime Minister Victor Chernomyrdin formally approved the package of structural reforms for the Russian Railways network (RG 2.98 p83). However, with the agreement of the Minister of Railways Nikolai Aksyonenko, a timescale has only been agreed for the first stage of the three-phase programme.

Over the next two years, new operating companies are to be created to take over freight, long-distance passenger and commuter traffic from RZD, and the 37 rolling stock maintenance workshops will be privatised. Financial management throughout RZD and the Ministry of Railways will be improved, and made transparent.

Phase II is expected to take four or five years, and provides a period of consolidation during which the new operating companies will become established and the initial objectives implemented. This is expected to lead to a halving of rail freight tariffs by 2005.

Phase III will encompass the division of RZD’s infrastructure business into a track owning and regulating authority and a series of repair and maintenance companies. At the same time, the government will assess the scope for transferring the established freight and passenger operating companies into the private sector.

The reform programme is expected to cut the railway’s workforce by around 400000; the total fell by 135000 (8·6%) last year to 1440000, lifting staff productivity by 4·5%. Another 10% cut in the headcount is budgeted for 1998. o