Government support for Russian Railways

Government support for Russian Railways from all budgets totalled RUB 112.2 bln in 2014, including federal budget subsidies of RUB 110.7 bln.

Government funding from all budgets
RUB 80.9 bln

Investment in the development of the Moscow Region’s transportation industry RUB 18.4 bln

Government projects continued in the reporting year to develop railway transportation infrastructure funded by the Russian Railways budget through contributions to the Company’s charter capital. Total contributions to Russian Railways charter capital amounted to RUB 29.8 bln in 2014, including:

In 2014, the Russian Government continued its regulation of tariffs for Russian Railways services to use the infrastructure of public railway transportation for suburban traffic. Subsidies earmarked in the 2014 federal budget to compensate for losses by Russian Railways associated with the provision of such services under a regulated tariff totalled RUB 24.4 bln and were received by the Company in full.

In addition, given the absence of tariff indexation for freight transportation, the Company experienced a shortage of funding sources in 2014 for major repairs on public railway transportation infrastructure. Subsidies have been allocated from the federal budget in 2015 as compensation for the shortfall in funds by Russian Railways in order to provide financial support for the safety of public railway transportation infrastructure through major repairs of such infrastructure in the amount of RUB 56 bln. Of this amount, RUB 30 bln were allocated in December 2014 as compensatory measures associated with the indexation of tariffs for freight transportation in 2015 below an economically viable level.

The government provided support to consignors and the public in 2014 via the Russian Railways budget in the form of subsidies amounting to RUB 0.5 bln to compensate for the shortfall in the Company’s income resulting from the transportation of cargo to heavily flooded areas of the Far East without charging freight rates.

The Company also received public support from regional budgets and extra-budgetary funds in 2014 in the amount of RUB 1.5 bln, including:

Government support from the federal budget in 2014
Indicator RUB bln
1. Direct support 80.9
Subsidies to compensate for income losses resulting from the state regulation of tariffs for services to use the infrastructure of public railway transportation for suburban traffic 24.4
Subsidies for the major repair of railway transportation infrastructure facilities 56.0
Subsidies to compensate for expenses associated with recovery work following heavy flooding in the Far Eastern Federal District 0.5
2. Implementation of government projects via the Russian Railways budget 29.8
Development of public railway infrastructure on the Mezhdurechensk-Tayshet section 8.5
Development of the Moscow Transport Hub 18.4
including from the federal budget 6.3
including from the Moscow budget 12.1
Rapid-transit and high-speed traffic 0.02
Comprehensive reconstruction of the M. Gorky-Kotelnikovo-Tikhoretskaya-Krymskaya section with a bypass of the Krasnodar hub 2.9
Total government support 110.7