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. Last Updated: 07/27/2016

New Rail Minister Reveals Train of Thought

Newly appointed Railways Minister Gennady Fadeyev swiftly handed out orders during his first day at work Tuesday that appeared to be aimed at changing the decisions that led to the sacking of his predecessor, Nikolai Aksyonenko.

Fadeyev told Railway Ministry officials at their first meeting in the new year to draw up measures to restructure the ministry's debts to regional and federal budgets, to slap tougher controls over its investment programs and to make sure that the railroads were not overstaffed.

Aksyonenko was accused by the Cabinet of dragging his feet on making good on the railroad's hundreds of millions of dollars in debt and of putting together an unrealistic 2002 investment plan. That plan, among other things, envisioned the construction of a multibillion-dollar bridge from the mainland to the Far East island of Sakhalin. Aksyonenko was also accused of keeping many more employees than needed on the ministry's payroll. The ministry employs about 1.5 million people.

Aksyonenko was fired by President Vladimir Putin on Thursday, about two months after prosecutors charged him with abuse of office for misappropriating 70 million rubles ($2.33 million) in ministry funds. An investigation into the case is ongoing.

Fadeyev, who is apparently a relative of Aksyonenko's, was named as his replacement Friday.

Dubbed a country within a country, the Railways Ministry runs a $10 billion-a-year operation that controls 159,000 kilometers of track. Those tracks carry 80 percent of all the nation's cargo.

Apart from running the railroad system, the ministry mines and refines raw materials like coal and metals, operates a number of hotels, schools and hospitals and owns publishing houses, entertainment centers, stadiums and soccer and hockey teams.

Despite the so-called natural monopoly's staggering holdings, Fadeyev, 64, has a very good idea about how it operates.

Fadeyev began his career in 1965 as a worker on the Eastern Siberian railroad. He slowly climbed his way to the top and was in 1992 appointed the first post-Soviet Railways Minister. He held the post until the summer of 1996, when he was ousted in a Cabinet reshuffle following President Boris Yeltsin's re-election.

In 1999, Fadeyev re-emerged as the head of the Moscow railroad.

Russian media reported that it was Prime Minister Mikhail Kasyanov who recommended that Fadeyev return to the ministry's helm.

Experts were cheered by Putin's decision to sack Aksyonenko but said the move was far less radical than the shake-up at natural gas monopoly Gazprom over the summer. The president replaced Gazprom veteran Rem Vyakhirev with an unknown outsider, Putin loyalist Alexei Miller, as chief executive.

In the case of the Railways Ministry, both Fadeyev and Aksyonenko are not only long-serving veterans but also, according to some media reports, brothers-in-law.

Ministry officials refused to confirm the reports Tuesday, but one representative said on condition of anonymity that "they are relatives of some sort."

"Unlike the approach taken toward Gazprom, it appears that Putin chose to just give the signal that if no order is brought from the inside, then heads will start rolling big time," said Yury Korgunyuk, a political analyst with the Indem think tank.

Korgunyuk said the appointment of Miller initially raised hopes of quick changes, but it soon became clear that reforms would only take place when tougher controls and order were implemented.

"The decision to appoint Fadeyev is a move similar to the replacement of Primorskoye Governor [Yevgeny] Nazdratenko [last year]," Korgunyuk said. "He was replaced by his own deputy [Sergei] Darkin, and it was Darkin who got the signal that the old practices are no longer acceptable."

Speculation about Aksyonenko's ouster had been swirling for months before the sacking, and some observers had linked a firing to his being part of Yeltsin's powerful inner circle. That circle has apparently slowly fallen out of the Kremlin's favor over the past two years.

But Korgunyuk said the fact that Aksyonenko was close to Yeltsin was not a factor in his dismissal because Fadeyev is also from the same inner circle.

"We do not have a fiefdom where being a member of a clan is a permanent feature," he said. "Clans can be easily changed, and individuals switch between them without much trouble."

It was unclear Tuesday how far Fadeyev was prepared to go in following the Kremlin's clear signal that he must get the house in order.

Ministry staff said, however, that the orders he had made at the meeting sounded tough and had sent officials scrambling.

In addition to the debt, investment and staffing issues, Fadeyev ordered a 15 percent hike in wages for railroad employees. The move follows a mandatory hike in salaries for federal employees that kicked in at the start of the year.

Ministry officials said it was to early to comment on how the reshuffle might affect planned rail reforms started under Aksyonenko. Those reforms envision the stage-by-stage privatization of the rail system over the next decade.

During his term as railways minister in the 1990s, Fadeyev strongly spoke out against the partial or full privatization of the railroads. He was also known to have been cautious about implementing any quick changes.

His first key test could come later this month when the Cabinet is to take up the Railways Ministry's 2002 investment plan. The Cabinet harshly rejected Aksyonenko's plan in November and sent it back to the ministry for reworking.

It was unclear Tuesday what Aksyonenko would do next.

The Prosecutor General's Office said late last month that it would complete its criminal case against him within weeks.