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. Last Updated: 07/27/2016

Chamber: Railways Reform Premature

A raft of bills to restructure the Railways Ministry is on its way to the Cabinet -- but a number of politicians, consumers, experts and even the railways minister himself said Monday that the industry is not ready for reform.

Deputy Prime Minister Klebanov said that within two days the last of four bills -- on the details of the railways industry's privatization -- will be completed and the entire package will be sent to the Cabinet, Interfax reported.

However, a roundtable at the Chamber of Commerce and Industry concluded that "a number of regulations in the bills do not correspond with the aims of the reform and can negatively affect the quality of transport service."

"One shouldn't rush," said Yevgeny Primakov, a former prime minister who now heads the chamber. For the legislative changes to be successful, he said, they must take into account the impact the reform would have on the economy as a whole, not just the interests of some ministries.

Both the chamber and the Russian Union of Industrialists and Entrepreneurs -- whose members are major railways customers -- could play a positive role in the restructuring by coordinating legislative changes with market players, Primakov said.

"The new bills would make transport services worse rather than better," said Georgy Davydov, deputy head of the Association of Railways Users.

Serafim Kolpakov, head of the International Metals Council, said that every side should be heard in the discussion -- including his council, which unites enterprises that pay some 37 percent of the Railways Ministry's cargo revenues.

"We insist on holding back the legislation," he said, referring to the four bills on their way to the Cabinet.

Konstantin Kholopov, an expert with the Academy of Foreign Trade, said the Railways Ministry -- "which still lives in the planned economy" -- is not ready to be restructured.

"I think that the reform must be delayed. There is no economic target in the existing program," he said.

According to the restructuring, a 100 percent state-owned entity called the Russian Railways Co. would be set up to run the commercial part of the ministry by the end of this year.

Railways Minister Gennady Fadeyev, however, said the alotted time is not enough for the break up. "The system is not ready yet to be cut in two," he said.

Summing up the roundtable's opinion, Deputy Economic Development and Trade Minister Andrei Sharonov said its participants believe the reform is too "exotic" and must be preceded by some less drastic changes.

"There is no alternative to reform. The situation with the railways industry is impossible to resolve without reform," Sharonov said.

But there are many issues still under discussion, he said.

For example, the government has not decide whether the ministry's infrastructure will be transferred to the Russian Railways Co., said Sharonov.

"What reform can we talk about if the government has not yet decided what to do with the infrastructure?" said Primakov.