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. Last Updated: 07/27/2016

Rail Reforms May Bring Tariff Cuts

If the guidelines for reforming Russia's railways are implemented successfully, it will be possible to halve railway transportation tariffs by the year 2005, Russian First Deputy Prime Minister Boris Nemtsov told the State Duma on Friday.

The guidelines, approved by the Cabinet, provide for the government to retain ownership of the railways, although several experts insisted on privatizing them under a plan similar to that for the Gazprom gas monopoly, he said.

Privatization of railway transport will be contemplated in the year 2005 only if the current reforms are implemented successfully, Nemtsov said.

The first stage of the program, scheduled to last to the year 2000, envisages creating unitary state enterprises for freight and passenger transportation, he said. Competition among them will contribute to reductions in tariffs, Nemtsov said. To scale back tariffs, an end should be brought to "crossroads subsidizing," he said.

Last year, tariffs on freight transportation were scaled down by 10 percent and tariffs on passenger travel over a range of more than 4,500 kilometers were cut by more than 30 percent on Dec. 1, he said.

The government-proposed draft 1998 budget envisages 450 million rubles in subsidies on transportation, Nemtsov said.