OREANDA-NEWS. January 31, 2012. Russian Railways, industrial enterprises and the state-owned bank Vnesheconombank have signed an agreement on the development of rail infrastructure to meet the needs of industry, reported the press-centre of RZD.

The agreement was signed in Kemerovo, and provides for the complete pick-up of goods as required by shippers by increasing the through capacity of railway lines.

In particular, industrial enterprises will, in cooperation with Russian Railways, determine on a long-term basis the volumes, timing and direction of freight shipments, while for its part, the Company will assess the need to increase through rail capacity and the possible return on these projects, as well as the possibilities for financing then.

In the event that Russian Railways meets its hurdle rate of return, the Company and the shipper will sign a contract which provides for the volume and timing of shipments, the long-term tariff level and mutual guarantees of the parties. In particular, if smaller freight volumes are to be shipped than agreed, the industrial enterprises shall compensate Russian Railways for the amount of goods not carried. The Company also undertakes to develop infrastructure to the extent necessary from its own or borrowed funds. At the same time, it is a priority to make the maximum use of available debt financing in order to hold down the growth in tariff rates.

In the case of infrastructure development projects which do not clear the Company’s hurdle rate, industrial enterprises, together with Russian Railways and local authorities in Russia, will initiate the formation of integrated investment projects to develop the relevant territory, including railways, and shall submit to Vnesheconombank and the specialised agencies involved a justification to implement these projects based on government support.