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. Last Updated: 07/27/2016

Cabinet Set to Review Rail Strategy

The Cabinet is set to discuss a development plan Thursday that could see Russian Railways spending 13 trillion rubles ($506 billion) to overhaul its infrastructure and expand railway connections to the country's major ports and business centers by 2030.

The Cabinet meeting will also review a strategy to sell off a minority of shares in the company, which is currently wholly state-owned.

The program will aim to improve the rail network's efficiency and quality of service, Russian Railways, or RZD, said in a statement posted on its web site.

RZD chief Vladimir Yakunin, who has been touted as a possible dark horse candidate in next year's presidential election, unveiled the plan at a meeting with President Vladimir Putin on Tuesday.

"The idea ... is to eliminate bottlenecks in the infrastructure" of the network and to underpin the country's economic growth, Yakunin said, Interfax reported.

Under the program, some of the company's outdated railcars and rolling stock will be replaced and 6,000 kilometers of new railroads, including high-speed rail tracks, will be built by 2015. A further 15,800 kilometers of rail lines are planned by 2030, including a 3,500-kilometer line to the Bering Straits and a link between Sakhalin and the mainland.

Eduard Faritov, a railways analyst with Renaissance Capital, said the sheer size of RZD would make it difficult for the firm to accomplish its goals efficiently. "While the company can compete with rivals abroad in profitability, it is counterproductive in Russia to leave such huge profits at the disposal of state monopolies," Faritov said. "The company is not functioning optimally at present, and privatizing it may help to raise efficiency."

n France's Alstom has won an order to supply new trains to Finnish-Russian railway venture Karelian Trains, Reuters reported Wednesday.

Karelian will buy four high-speed Pendolino trains for 120 million euros ($163 million), with an option for two more, Alstom said in a statement. The trains will enter service in 2010, Alstom said.