Text 4: Joint Stock Company Russian Railways

In the past Russian railways were built as part of the national development plan for strategic and security reasons. The system entirely belonged to the Railways Ministry, a state within a state. It was completely owned, regulated and operated by the government. However, the funds from the government became insufficient to keep the railway in good operating condition. In response to the increasing needs of economy, the system was completely renovated.

Reforms started in September 2003 with the establishment of the joint stock company Russian Railways (RZD). The Russian Federation became the only shareholder of the company and delegated shareholder control to the Government.

Being a large monopoly of vital strategic importance, JSC Russian Railways is regulated by several governmental bodies with different functions. Thus, the Ministry of Transport and Communication is responsible for the regulation and licensing of the railway industry. The Ministry of Economics Trade and Development approves RZD strategic plans and the key budget parameters. The Federal Tariff Service answers for the tariff policy and electrification of the railway industry. The Ministry of Finance is responsible for taxation and subsidies.

JSC Russian Railways is the sole owner and operator of the railway infrastructure in Russia. The company's assets include track depots, stations, switching facilities and dispatch centres. The company has the largest freight rolling stock and operates all the passenger service rail assets. It has the largest locomotive fleet.

RZD is constantly expanding and upgrading its domestic and international services. The company provides maximum comfort and reliability for all passengers, including new rail-air links, luxury compartments and suburban transit trains.

The new high speed Sapsan trains are the pride of the company. The trains were developed by Siemens specialists with the involvement of RZD representatives and higher education institutes. The Sapsan trains fully comply with the Russian Federation safety standards. Their design ensures reliability, energy, efficiency, safety and comfort for passengers and personnel.

Nowadays RZD is successfully integrating into Eurasian transport infrastructure. Russian railways cooperate with European and Asian railways and have common routes with them.

Questions for discussion:

1. How were Russian railways managed in the past?

2. When and why was JSC Russian Railways established?

3. What governmental bodies regulate JSC Russian Railways?

4. What corporate structure does the company Russian Railways have?

5. What are RZD assets?

6. Why do you think RZD is a company of vital strategic importance?

7. What does the company Russian Railways provide for passengers?

8. Who worked on the project of the Sapsan trains?

9. Why do you think the Sapsan trains are fully reliable and energy efficient?

10. How is RZD integrating into Eurasian transport infrastructure?

Module VI: International Organisations