OREANDA-NEWS. April 23, 2012. Maxim Schneider, head of the Centre for Corporate Governance of the Suburban Complex at Russian Railways, announced that this year, the Russian Railways’ holding would incur total losses from suburban commuter services of over 25 billion roubles. Schneider made the announcement during a presentation at an All-Russian Meeting of the Federal Tariff Service on "The Results of the Work of the State Regulatory Agencies in 2011 and the Main Tasks for 2012 and 2013", reported the press-centre of RZD.

In particular, Schneider noted that not all regions had adopted solutions aimed at ensuring the availability of public transport in 2012. Five regions had still not signed contracts for transport services with six suburban commuter rail companies: the Republic of Komi, Kaliningrad Region, Dagestan, Chechnya and Primorsky Territory.

In addition, the budgets of a number of regions currently lack any item for expenditures to compensate for lost revenues from passenger traffic in 2012, including Vladimir Region, Vologda Region, the Buryat Republic, Leningrad Region, Tver Region, Primorsky Territory, Astrakhan Region and Kurgan region.

Of the 73 regions in which suburban commuter rail services are provided, only nine currently pay full compensation for lost income from passenger traffic in 2012 – Sverdlovsk, Omsk, Tomsk, Ryazan and Orenburg Regions, as well as the Republic of Karachaevo-Cherkessia, North Ossetia-Alania, Khakassia and Khabarovsk Territory.

In his presentation, Schneider requested the representatives from the administrations of the constituent parts of the Russian Federation and the Federal Tariff Service present at the meeting to support Russian Railways in achieving an early adoption of the draft Federal Law "On Regular Train Services in the Russian Federation" and stressed the need to develop and agree with the carrier the volume of suburban railway services.

"These measures will help ensure the availability of transport and the population’s mobility, as well as improve the quality of passenger services on suburban commuter trains, said Schneider. "During 2012-2013, we also have to discuss a number of public development options in order to ease the situation for all of us in setting tariffs and the level of compensation for lost revenues.

In particular, Schneider noted that the regulation of transport tariffs had to be developed at federal level and a methodology approved for determining the lost revenues incurred by the carriers. In addition, he proposed amending Federal Tariff Service Order No. 506-T of 19 August 2011 and reassess the obligation of the regulatory authority to take decisions on establishing (changing) transport tariff rates both with regard to the population, and the economically justified tariff level to determine the amount of lost revenues. It is also proposed consolidating the regulator’s obligation to direct decisions about the value of economically justified expenditures and the commercially justified effective tariff to the subjects of natural monopolies.

There is also an obvious need at the regional level to adopt regulations governing the procedures for regulating tariffs in suburban transportation.

Russian Railways asked the participants at the meeting to consider the Company’s proposals to improve tariff guidelines for infrastructure services, including:

extending for the long term the subsidies for the infrastructure spending of the suburban carriers
providing a detailed list of the work and services for which costs are included in the infrastructure tariff excluding from the costs taken into account when drafting the tariffs the cost of electricity for traction considering in the long term the question of differentiating the tariff so that it would reflect the cost of services directly related to granting the rights to use the infrastructure.

"We have done a lot for the suburban passenger complex. In 2010-2011, there were significant changes which allowed suburban rail companies to work in the new conditions. In addition, the decision adopted in 2011 to provide targeted support from the federal budget to suburban transport has reduced the tariff burden on passengers and in general stabilised the volume of transport on offer. This is evidenced by an increase in passengers using suburban train services of 5.6% and the rise in the number of passengers carried by commuter suburban trains of 4.6%," said Schneider. "However, despite all this, total losses from suburban commuter transport in 2011 amounted to over 8.5 billion roubles."