Optimization of the RZD Expenses will Increase the Investment Budget

According to President of JSC Russian Railways Oleg Belozerov, “Optimization of the Company’s Expenses Will Increase the Investment Budget”

October 14, a meeting between Russian Prime Minister Dmitry Medvedev and President of JSC Russian Railways Oleg Belozerov took place. It focused on the development of suburban passenger services, the implementation of the investment program of the company, and reducing costs and improving the efficiency of rail transport.

Mr. Belozerov said that the decision of the Russian government to support the suburban passenger companies (SPCs) that was adopted this year has already yielded positive results. Through the establishment of a zero VAT rate, a preferential rate of 1% in the infrastructure tariff, and working with the regions and governors to allocate compensation for lost income, the financial position of the SPCs managed to stabilize.

“Preliminarily, regional budgets had 7.6 billion rubles at the beginning of 2015, and it has increased to almost 11 billion rubles. I want to say that, according to the results of 2015, we plan to enter options that are close to breaking even. This will be the first time in history,” said Mr. Belozerov.

Successful financial performance makes it possible to provide customers with new services and add comfortable, modern high-speed trains to our routes. In particular, on September 2, the Lastochka express train was launched on the route St. Petersburg-Vyborg, and on October 1 it was added to the route Moscow-Kryukovo-Tver, significantly reducing travel time.

One of the topics of discussion was the steps to reduce costs and increase efficiency that the company has taken.
“We understand that now development is only possible by optimizing our operations. We are working in almost all areas, starting with improving productivity (this year we assume that will grow to 5%). We are very seriously optimizing prices and unit cost for procurement and construction. Moreover, we are now actively implementing a technological and pricing audit,” said Mr. Belozerov.

The president of Russian Railways noted that these measures made it possible to increase the investment budget of JSC Russian Railways in 2016 to 432 billion rubles, which will give an additional multiplier effect for the development of the national economy.

Source : RZD