Decision made to switch Russian Railways to new tariffs

Decision made to switch Russian Railways to new tariffs

The authorities decided that after 2025, when the current long-term development program for Russian Railways expires, the monopoly will need a new tariff system. The Ministry of Economy gave a little more than a year to develop it; the system will come into effect in 2026. According to market participants, the uncertainty with future transport tariffs will lead to a decline in investment activity, as subsoil users will be slow in starting new projects.

Prime Minister Dmitry Medvedev decided to launch the reform of the tariff setting of Russian Railways – such a decision was recorded following the meeting on November 12, it follows from the protocol (Kommersant has it). Until January 30, 2021, the Ministry of Economy, the Federal Antimonopoly Service, the Ministry of Transport and the Ministry of Finance together with Russian Railways should submit to the government a new model of tariff regulation in the field of rail freight. It will enter into force on January 1, 2026, according to the protocol. Departments and Russian Railways did not provide operational comments to Kommersant.

The main features of the new tariff model were described in an interview with Kommersant by Oleg Belozerov, the head of Russian Railways. According to Mr. Belozerov, the model will work on the principle of a calculator that automatically calculates the tariff for the transportation of a specific cargo on a specific route, taking into account the additional needs of the client. He also mentioned the previously announced convergence of tariffs for metallurgists (reducing the cost of transporting finished goods and increasing the cost of transporting raw materials) and shifting the emphasis in the tariffing of coal transportation so that not long-distance, mainly export, transportation, as it is today, is cheaper, but domestic, short.

In October, Vladimir Vargunin, head of the monopoly tariff setting methodology department, spoke in more detail about the main features of the new concept. It provides for individual tariff solutions for a specific client and route, the formation of tariffs based on the characteristics of the car, and not the cargo in it, a single ton-wagon tariffication, full unification of the empty mileage tariff.

Experts noted that the most controversial aspect of the new concept is the introduction of individual tariffs, which is fraught with discrimination of some shippers relative to others.
The FAS told Kommersant that the service is in favor of maintaining the tariff load “inflation minus” even after 2025 for all cargoes. “The revenues of Russian Railways should be developed by increasing the cargo base, rather than lobbying opportunities for“ new ”tariff systems,” they emphasized. A breakthrough in competitiveness will be achieved with the development of three network-independent carriers independent from Russian Railways – immediately after 2025, the FAS added.