OREANDA-NEWS. On September 10, 2008 Vladimir Yakunin, the President of Russian Railways, met the Russian President Dmitry Medvedev and told the head of state about the status of the Company during the last 6 months, in particular about changes in the existing tariff policy, reported the press-centre of Russian Railways.

“Before this year, the tariff policy was really balanced, but the trend this year has been linked to the international situation and internal problems, and this has led to imbalances in the tariff policy,” said Vladimir Yakunin.

From 1991 to the present, the increase in railway tariffs has been several times lower than the growth in prices in basic industries. For example, prices in the fuel industry have increased by a factor of 451, in the steel industry by 219 and in the coal industry by 191 and in the electricity sector by 131, while the tariffs for railway transportation rose by a factor of just 80.

In May 2008, Russia’s Ministry of Economic Development clarified various scenarios for the functioning of the country’s economy and basic parameters of its forecast for national socio-economic development up to 2011. Compared with the previous forecast, which was used to draw up a financial plan that was endorsed by the Russian Government, the parameters of the scenarios have undergone significant changes. Thus, the forecast for the consumer price index for 2008 has been increased from 107.9% to 112.9%, while the producer price index for industrial goods is forecast to rise from 106.8% to 125.1%.

The decision on July 1, 2008 to carry out an additional indexation of tariffs by 8% only partially solves the issues of financing rail transportation. The tariffs ensure Russian Railways earns minimum standards of profitability, but brake investments in the development of the railway industry as a whole.

As Vladimir Yakunin pointed out, in 2003 the growth in tariffs led to inflationary growth of 0.7% in 2008, while in 2008, the increases in tariffs will lead to an increase in inflation of 0.24%. The transport component in the final price of goods is steadily declining, however, and in the last 5 years, it has decreased by a factor of two.

However, the President of Russian Railways also stressed that the Company is actively working to improve tariffs and attract investment.

In addition, Yakunin noted the need to change existing laws. “I think that we need to move from a three-year planning cycle, for example, compensation for our losses on passenger services, to a law under which the state should solve the question for that period of time during which social subsidies for passenger transport exist,” said the President of Russian Railways.

Another important issue is the development of high-speed connections. “On this question, there are no regulations or any regulatory framework,” said Yakunin. “It is imperative that this regulatory framework emerges. That will provide a legitimate basis for the development of projects to promote and finance high-speed communications.”