Vladimir Yakunin, President of Russian Railways (RZD) presented the company’s preliminary results for 2014 to the Board of Directors.

In 2014, RZD invested a total of RUB 335 billion in fixed assets,  modernised 3,950 km of railway track, 228 km of the catenary system, 144 km of the automatic blocking system, 711 km of cable communication lines and 27 traction substations.

RZD is also continuing a series of complex projects, such as the modernisation of the railway infrastructure on the Baikal-Amur and the Trans-Siberian Main Lines, the reconstruction of the stretch between Mezhdurechensk – Taishet and the reconstruction of the section between Maxim Gorky – Kotelnikovo – Tikhoretskaya – Krimskaya with a bypassing around the Krasnodar hub.

“The Company is implementing important projects which the economy needs. Their cumulative effect is much higher than the volume of capital investment. Moreover, increasing such investments during economic slowdowns is consistent with international experience,”  Yakunin stated.

Loading volumes of goods on the railway network in 2014 decreased by 0.9% compared to 2013. Export shipments rose by over 5%, while loading on the domestic market fell by 3.6%. After taking into account empty wagon runs, freight turnover increased by almost 5% compared to last year by increasing shipment distances.

As a result of anti-crisis measures, Russian Railways reduced the cost of transportation by 0.7% in 2014.

Yakunin highlighted the negative impact of not increasing railway tariffs in 2014, which should have stimulated industry and contributed to slowing inflation. Yakunin stressed that while freight transport tariffs remained at 2013 levels, the cost of the fuel used by the Company rose by 11%, its electricity by 6.3% and metals by 5.2%.

In addition, the Holding Company had to compensate for the effect of tax increases and deductions, namely the abolition of privileges on the property tax and the increase in insurance premiums, by mobilising its internal resources.

In 2013, Russian Railways paid RUB 237.2 billion in taxes to budgets of all levels, but in 2014 the figure was more than RUB 255 billion.

“In 2013, the Company’s expenditure base was reduced to RUB 100 billion and to RUB 85 billion in 2014. In 2015, in accordance with a Russian Government decision, we will reduce costs by another RUB 5.5 billion,” said Yakunin.