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Wednesday, March 14, 2018

“From the new head of the Russian Railways and roads are waiting for more profit”

A ten-year era Yakunin finished. The new head of the Russian Railways Deputy Minister of transport Oleg Belozerov. It will be tasked, has long stood before the leadership of the transport monopoly: to return the Railways a profit, build still more roads and not to lose focus passenger transport.

Prime Minister Dmitry Medvedev appointed head of Russian Railways, first Deputy head of the Ministry of transport of Russia Oleg Belozerov. The transfer of authority from Belozerova Yakunin, will be held tomorrow, Friday.

“People are unhappy that the routes are canceled. On the other hand, the railway needs money and not just a loss to be, and to have resources for development

Before the new head of Russian Railways tasked primarily to draw attention to the company’s budget, investments and passenger services. “No complaints here very much. People are unhappy that the routes are canceled. On the other hand, the railway needs money and not just a loss to be, and to have resources for development”, – said the head of government. According to him, the new head of the company remains with the government and regional authorities to combine these two approaches.

Yakunin reportedly seeking to become the Senator from the Kaliningrad region (he has the diplomatic rank of extraordinary and Plenipotentiary Ambassador, which allows him to run for Senate with no residency requirements).

Financial status of Railways in General is not a bad thing. However, there are dangerous trends. Since 2009 the company’s revenues steadily increased, however, profits gradually declined. In 2014, RZD, and even incurred a loss in the amount of 99,32 billion roubles under IFRS.

The Railways every year trying to knock out more and more subsidies. So, in 2010, Russian Railways had received subsidies of 50 billion roubles. However, in a crisis, spending budgets several times already cut and will be cut. And Railways, in addition to subsidies, still need government investment in infrastructure – this high-speed highway Moscow – Kazan, and the expansion of BAM and Transsib. This year the Railways had of narrowing down: they just received 30 billion rubles of compensation of dropping out incomes.

The main concern of the financial condition of Railways is causing the increase in debt in foreign currency. Over the last five years the Railways have stepped up risky debt issuance. “Most frightening of investors planned to increase the share of Eurobonds in the structure of debt capital from 15% in 2010 to 47% at the beginning of this year. On loans in foreign currency accounted for 44% of the total loan portfolio of the state monopoly. This created the danger of a shortage of foreign currency loans to perekreditatsii”, – says Mikhail Krylov from “Golden Hills – Kapital AM”. Solution of debt problems is another task for Belozerova.

“In the conditions of budget deficit the state is, in essence, tries to get every accountable to industry savings. And given that Yakunin has declared the chronic shortage of funds, this position in a crisis of 2015 is not going to work. The government needs the right person, a public servant with an extensive track record and experience in the transportation industry. In this regard, not surprisingly, was nominated Belozerova,” – says the managing partner of the audit company “2K”Tamara Kasyanova.


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