OREANDA-NEWS. February 10, 2011. "The major changes to Russia’s economy during the last 20 years necessitate constant upgrading and modernization," said First Vice-President of Russian Railways Vadim Morozov at the Russia Forum. "During the time Russian Railways has been undergoing restructuring, the Company has played its part by investing 1.7 trillion roubles and modernising our fixed assets. Even so, despite the fact that Russia will still take a few years to emerge from the crisis, these investments are insufficient to ensure steady growth", reported the press-centre of RZD.

Increasing growth in Russia requires not only surmounting the existing bottlenecks caused by inadequate infrastructure, but also ensuring that new infrastructure is in place ahead of projected demand so that sufficient capacity is available to avoid slowing future development.

According to Morozov, the crisis has changed significantly not only the value of investments, but also the principles of the "Strategy for Rail Transport Development to 2030", which was approved by the Russian government in 2008.

This applies above all to the mechanisms for drawing up the Company’s investment programme. Sources of funding include not only depreciation and Company profits, but also the investment component of freight rates, government funding and funds from the constituent parts of the Russian Federation. The Company’s investment programme for 2011 is 348 billion roubles, of which 60 billion roubles are slated for the construction of facilities for the 2014 Winter Olympics in Sochi.

Morozov also said that if investment in rail transport remains at that level, the rail system will not be able to export as projected 150-160 million tons of freight by 2015 and 300 million tons by 2020, and total losses will amount to over 240 billion rubles.

"Therefore the search for sources of faster economic growth is a major issue, and the right answer must be found quickly. We are convinced that the development of transport infrastructure will underpin our economic growth," said Vadim Morozov.

The Company is continuing to rely on its own resources to increase investment, especially by increasing its overall efficiency and selling non-core assets. Resolving the issue of infrastructure development, however, cannot be done without state participation.

Morozov said that state support requires the phased introduction of commercially viable freight tariffs, as well as the implementation of a network contract mechanism. In addition, private investors could be brought in to help develop the rail industry through the issue of infrastructure bonds.