Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Fare Hikes Unlikely to Help City-Owned Transport Firms

The Moscow city government intends to raise fares on municipal transport by 25 percent to 50 percent from May 10.

However, the move will not affect half of the capital's citizens who get free rides and massive discounts on municipal services from the government.

"Most probably, [Yury] Luzhkov will sign the decree before May 10," Olga Torchevskaya, spokeswoman for City Hall's transportation department, said in a telephone interview Thursday.

A single trip on the metro could go up to 5 rubles from 4 rubles (14 cents to 18 cents) and on the ground transports - buses, trolleybuses and trams - from 2 rubles to 3 rubles. Bus and trolley drivers sell the tickets for 2.50 rubles, making a 25 percent profit on each ticket, but officially the price stands at 2 rubles for a one-way trip.

But even such increases will not allow the city-owned transportation companies - Mosgortrans and Mosmetropoliten - to break even.

"Revenues cover only 30 percent of the transportation cost," said Galina Garanina, head of Mosgortrans, which operates buses, trolleybuses and trams.

The remaining 70 percent is financed from the budget, with 2.7 billion rubles ($84 million) being set aside for this by City Hall this year.

However, the budget was drafted on an assumption that tariffs would average 3 rubles this year, Garanina said.

The Moscow metro makes customers cover 70 percent of operational costs, but its revenues fall short of expenses by an extra 70 million rubles every month.

Additionally, investment expenditures are not covered by the tariffs, so in order to finance expansion, the metro needs a helping hand from City Hall.

"Tariffs cover only operational expenses," said Mosmetropoliten spokesman Konstantin Cherkassky.

Officials at both companies said the government has to stop handing out benefits in kind to various categories of consumers and that price hikes will not solve their financial problems.