November 15, 2013

RZD presents $US 37.8bn three-year investment plan

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The investment plan includes improvements to infrastructure in and around Moscow. The investment plan includes improvements to infrastructure in and around Moscow.

THE Russian government was presented with a provisional three-year investment budget of Roubles 1.2 trillion ($US 37.78bn) for Russian Railways (RZD) during a cabinet meeting on November 14, which includes investments of Roubles 395.6bn in 2014, Roubles 415.2bn in 2015, and Roubles 438.4bn in 2016.

Capital projects worth Roubles 418bn are earmarked for the investment plan, including enhancements to the Trans-Siberian Railway and Baikal - Amur Mainline (BAM), improvements to railway infrastructure in and around Moscow, increasing capacity on the Mezhdurechensk – Taishet freight line, which is estimated to cost Roubles 9.9bn, and building a bypass around Krasnodar.

In addition, 9300km of lines, 660km of overhead catenary and 245km of automatic block signalling will be reconstructed, while 1529 new locomotives will be purchased, including 629 units in 2014 and 450 units in 2016.

RZD president Mr Vladimir Yakunin also reported the railway's provisional results for 2013 during the meeting. He said that changing macroeconomic conditions and a significant slowdown in industrial production resulted in a 3.1% fall in freight volumes compared with 2012, which contrasts with previously predicted growth. This trend is projected to continue in 2014, with freight volumes as a result only predicted to grow by 0.4%.

With such limited growth predicted, Yakunin said steps are being taken to ease the impact on RZD's financial performance in 2014.

"After the Russian government decided to freeze tariffs in 2014 to ensure the company broke even, the board was forced to take additional measures to further reduce costs by Roubles 84.9bn, and increase revenue receipts," Yakunin said.

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