29 August 2003 02:25
Railways Writes New Rules for Cargo
The Railways Ministry on Thursday introduced sweeping new rail cargo regulations, saying it would give private
companies more incentive to buy more railcars, fueling competition in the reforming sector.
Many rail operators were skeptical of the long list of new prices and rules, though, with some saying the new rules
would only create additional advantages for new private supermonopoly Russian Railways Co., the $50 billion, 100 percent
state-owned firm due to be spun off from the ministry this fall.
"It is a historical event," Yury Kosov, head of the Railways Ministry's commercial cargo department,
told reporters Thursday. "At midnight [Wednesday] a fateful document for the Railways Ministry and its customers
came into force."
The new regulations are fundamentally different from the old ones that had been around since 1990.
"The old list could have stayed in place for another 10 years, but due to ongoing structural reforms, it needed
to be changed," he added, saying the new one creates a level playing field for all cargo carriers.
Rolling stock owners are to pay only for the use of infrastructure and Railways Ministry locomotives, something the
the ministry hopes will stimulate companies to buy their own rolling stock, Kosov said. Companies could save an average
15 percent on rail transportation expenses by using their own railcars.
Previously, those who owned their own rolling stock had to pay full tariffs. Now tariffs will be calculated
separately for infrastructure, locomotives and railcars.
Prices on the new list also differ depending on destination. The ministry increased tariffs for shorter destinations
and reduced tariffs for long-distance routes.
The Railways Ministry has toughened the weight standards that flat and tank cars are required to meet before they are
allowed to set off.
The three main cargo classifications have remained.
For first-class cargo -- including substances like coal, ore, aluminum, non-ferrous metal concentrates and wood chips
-- tarrifs will be reduced by an average 4 percent. On some items, though, the decrease is more dramatic. For example,
the cost of transportating coal on a company's own railcars would drop 41 percent, by 31 percent for ore, balanced
out by miniscule increases on a vast range of other goods in the class.
Revenues gained from increased second-class tariffs -- covering crude and fuel oil, mineral fertilizers and bricks --
compensate for the first-class decreases.
Second-class cargo has become 3 percent more expensive on average. Prices on crude oil will increase by 12 percent
and diesel and fuel oil prices will rise 6 percent.
Prices for third-class cargo -- oil products and non-ferrous and ferrous metals -- were left unchanged.
Prices for all types of container cargo, which are primarily used to carry goods across national borders, were
increased 20 percent. Kosov said this was simply because container tariffs had not been increased since 1995.
"The new price regulations won't change the Railways Ministry's revenues from cargo
transportation," Kosov said. "The rail tariff increases that were capped by the government at 12 percent for
2003 won't be exceeded."
The new regulations are the fruit of three years of deliberations by representatives from the Railways, Finance and
Economic Development and Trade ministries, the Federal Energy Commission and various industry associations.
Yevgeny Neporada, who oversees rail cargo for the St. Petersburg-based transportation group Incotec, was unsure of
the value of the new regulations.
While the new rules create preconditions for operators to acquire their own rolling stock, he said, the price
increases on some cargo will not increase the competitiveness of the industry.
For example, rail transport of food products in some regions, in particular in Moscow, might become uncompetitive
compared to auto transport, Neporada said.
"Introducing the new price list will lead to significant growth in prices on consumer goods, products,
medicines, cars and office equipment in the regions," said Roman Denisov, deputy director of transport firm MTK
Twins.
He said that those with complaints were advised at a meeting with the document's authors to take their appeals
to Prime Minister Mikhail Kasyanov, who signed the document setting it into force, or directly to the Constitutional
Court.
.TX-..**********************************************
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