Moscow is introducing an “urgent” price increase for rail freight services. This decision should help Russian Railways (RZD) cope with its extreme budgetary pressure. Russia is also preparing a far-reaching financial aid package for the rail operator.
From 1 March, rail freight services on the Russian Railways network will become more expensive by 1%, reports The Moscow Times on the basis of a Russian government decree.
“Russian Railways is effectively bankrupt and has no chance of getting out of the hole on its own”, The Moscow Times cites Sergey Aleksashenko, a senior research fellow at the NEST Centre in London. Therefore, the government has decided to bail out the monopoly “by all means.”
Reuters calculated that the tariff increase will add 22.3 billion rubles (around 250 million euros) to RZD’s budget. The measure is applicable for all shippers.
It is all going downhill
Russian Railways has already lost 14% of its rail freight business since the start of Russia’s invasion in Ukraine, says The Moscow Times. RZD has accrued a debt of four trillion rubles (44 billion euros). Between 2022 and 2025, RZD has also lost 12.5% of its loading volume, a figure that the rail operator publishes each month.
The financial problems at RZD are having a far-reaching impact on the company. It has had to send employees on unpaid leave and reduce its workforce. The company has also significantly reduced its investment programme for 2026 and it is considering the sale of its 49% stake in Federal Freight Company for the equivalent of around 500 million euros. Moreover, RZD may abandon the construction of the Northern Siberian Railway due to financing challenges.
As a result, the Kremlin is preparing a financial aid package of 1.3 trillion rubles (14 billion euros). This includes a debt restructuring and assets sales, such as the company’s skyscraper in the Moscow business district.