Install

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

. Last Updated: 07/27/2016

Transportation Ministry Drafts Minimum Railcar Requirement

The Transportation Ministry has drafted a government resolution that would require railroad operators to have at least 1,000 railcars and locomotives.

The companies would have to operate the rolling stock based "on the right of ownership or other right," according to a document, posted on the ministry's web site, Interfax reported earlier this week.

There have been proposals in the past to reduce the number of rail freight operators in order to resolve problems with freight shipments. Kemerovo region Governor Aman Tuleyev, for example, urged the Economic Development Ministry and President Dmitry Medvedev to do this last fall, when the region had problems shipping out coal. Some local businesses proposed reducing the number of operators by imposing a numerical requirement for amount of rolling stock.

However, this idea was opposed by both Russian Railways and operators.

"I am not an advocate of prohibiting [smaller operators from working]," Russian Railways vice president Salman Babayev said in October.

"Many of these companies operate very profitably, they cover certain regional segments and some of them even try to invest in infrastructure development of their clients' transport complex. So this problem cannot be resolved administratively. You can't deprive people of their businesses, deprive workers of their jobs," Sergei Maltsev, chairman of the Council of Railroad Operators, said at the time.

Transportation Minister Igor Levitin said repeatedly that there were no plans to impose numerical requirements for operators.

Maltsev said consolidation should be encouraged on the basis of industry self-regulating organizations. A requirement could be imposed for operators to be members of such associations, so that the organization itself could determine the economic incentives and methods of "public enforcement" to optimize traffic patterns and prevent unfair treatment of clients.