THE COUNCIL of the Federation, the upper chamber of Russia’s Parliament, held hearings on December 22 at which the government’s latest strategy for restructuring the national railway was endorsed. It follows the European model of a state infrastructure authority providing track access to competing train operators. Formal adoption of the concept by the government was expected last month.

Details of the strategy had been presented by First Vice-Chairman of the Federation B E Nemtsov to the Board of the Ministry of Railways on November 16, when he outlined his government’s expectations for 1998 and the years beyond. It goes much further than the ’anti-crisis programme’ introduced last summer following the appointment of Nikolai Aksyonenko as Railways Minister (RG 9.97 p575), and follows logically from last November’s decree signed by President Boris Yeltsin requiring RZD’s 37 workshops repairing locomotives and rolling stock to be sold off during 1998 (RG 1.98 p7).

Ownership and responsibility for maintaining track and structures throughout RZD’s 87469route-km network - still by far the world’s largest under single management despite the break-up of Soviet Railways - will remain with the Ministry of Railways; Nemtsov stressed that ’it will never be privatised’. The ministry will also retain responsibility for electrification and signalling systems, and will staff traffic control centres.

Competing operators

Train operation is seen as the area suitable for competition. To promote this process, a number of large state-owned companies will be established carrying freight and long distance passengers. They will specialise in particular types of traffic, such as intermodal, and will be able to bid for business anywhere in the country - perhaps even beyond Russia’s borders if the opportunity arises.

Locomotives and the rolling stock fleet are to be divided between the train operating companies during the coming months.

Although Nemtsov said in November that these companies would remain under the control of the Ministry of Railways, it is clear that real competition can only emerge when they are privatised. Given the pace and scope of privatisation elsewhere in Russia’s economy, this has to be the government’s objective.

Indeed, Nemtsov as good as confirmed this by defining only two tasks for the ministry in the future: developing national railway policy for government approval, and controlling the operation of the rail network.

The process of creating independent commuter train operators for each major city has now been confirmed, following successful trials in St Petersburg and nearby Novgorod where Transcom was established in October 1996 (RG 1.98 p10). Responsibility for subsidising operations and investing in new rolling stock is to be transferred to local authorities. Again, this clearly presents the opportunity for privatisation or franchising, as is currently happening in Stockholm.

In the short term, Nemtsov instructed the railway ministry to continue cutting operating costs in line with falling traffic, introduce computerised management information systems, and boost traffic on the Trans-Siberian line. o