Today’s Problems in Development and Restructuring of Railway Transport

Abstract

One of the main tasks to be solved within the railway restructuring framework was improvement of investment opportunities in the railway industry. However in the course of the reform no cardinal growth of investment attractiveness of railway transport was observed. The sole exception is railway car fleet which showed 40-percent increase during the decade in terms of stable route-length of the RZD network, thus bringing the diminishing returns law in action on railway transport. To avoid reduction in efficiency of railway transport and downturn in the economy-essential transport services the development of infrastructure and traction power complex should be intensified and brought into line with the development of railway rolling stock fleets and challenging traffic demand of the economy and population. And with this not only average level of the demand but also its geographic and seasonal fluctuations must be considered. Critical solutions must be found to get underway a full-dress investment process corresponding to the railway industry development strategy. To secure this objective one ought to combine broadening the RZD market opportunities with attracting private investments to railway infrastructure sector. It is necessary to switch railway system to market relations to the maximum possible extent in terms of traffic fares, property management, investments etc. And this is going to be cardinal solution of the railway transport development problem allowing to reduce the demand for budgetary appropriations by way of replacing public investments with private ones in the macroeconomic environment characterized by budgetary limitations. To solve the problem of capital mobilization for railway transport development there is needed more profound market-oriented reform of regulatory model of the JSC RZD financing and tariff setting activities.