• 2019 April 25

    Oleg Belozerov, President of Russian Railways (RZD)

    On competition between rail and inland transport

    - We need to answer the main question: how can we all (all transport modes) build intermodality ... First question .. a global question: do we need the fleet? It seems like everyone would answer ‘sure we need the fleet’ - and all further conclusions are based on this. Let's go back, after all, to the question: do we need the fleet? And split the answer into several parts. The fleet is different. We see growing seaborne traffic - and it seems to me that maritime traffic needs its own set of measures that could potentially be used. Moreover, maritime transport carries different loads. For example, Sovcomflot builds ships and it seems to me ... that this is the best company and it operates within the existing legislation, both with profit, and losses, but it exists and it is a good, large, major company, there might be kind of a segment of certain transportation... Therefore, it seems to me that we should start with a goal.

    Like the inland waterways. We have differences in comparison with China. As far as I understand, it is easier to sail along the river there, since there is not that much ice like we have here, maybe there is no ice at all, and accordingly, the operation of ships there is different... Therefore, as to the ‘do we need the fleet’ question - do we need inefficient fleet? Now, can we answer this question?

    Let’s say I am an employee in oil industry and there are different modes of transport. And they want me to operate at a loss. We will never be able to enforce a private trader non-competitive measures. Because if we continue pushing on him, he will say, ‘Well, then why on earth should we stay and work in Russia with such environment, when you, apart from taxes and something else ... added the transportation that is not cost efficient at all... You have besieged us from all sides, but then compensate it somehow. For example, oil companies receive fuel cost excise tax back... But it seems to me that such non-commercial approaches, well, are unacceptable today. We need to find an option on how to make shipping more profitable...

    We need to carry out comprehensive work and decide whether we need this mode of transport, after all? Maybe we should abandon shipping (of oil products by inland transport - Ed.). I know, it sounds a bit unacceptable, and I do not call for this right now, but we must raise this question that way. If we do not reach any economically advantageous conditions for oil product inland transportation, then maybe we should forget about this mode of transport? Actually, I do not really know, you know, may be we need to calculate the tariffs, to see what’s good and what’s bad. Moreover, in my understanding, in some cases, we, the Russian Railways, should ban, also sounds extraordinary, to have redundant infrastructure. What will be cheaper: to carry oil products by river ships in the summer season in the period when we perform overhaul of our rail infrastructure? I do not know how much there will be, definitely some volume, whether it’s heavy traffic or not, but there is exactly such a volume. Accordingly, either we must maintain the excessively large infrastructure that we need to invest into, take money from shippers, operators, or it would really be cheaper to move loads by river? This is the intermodality, complementing each mode, the country and the shippers from this approach should definitely get cost decline... That is, we should look for some options.

    Further, the load on roads. In fact, the volume of construction cargo carried by railways is growing, it seems to me that the volume of this type of cargo transported by river vessels should also increase, since the regulations restricting transportation by trucks have been introduced and control there is more stringent. These things need to be compared.

    Transcript of the meeting of the Commission of the Russian Union of Industrialists and Entrepreneurs (RSPP) on transport and infrastructure development by the IAA PortNews.

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