Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for improving Rail Sector Performance
Case Study: Russian Railways
4.2 Financial Performance
Despite successful market performance, RZhD financial performance remains
unsustainable. Under Russian accounting standards RZhD is supposedly profitable
(Figure 8), but according to international accounting standards, RZhD is not
profitable. To illustrate the difference, in 1999, RZhD recorded a Rubles 26 billion
profit under Russian accounting standards, equivalent to a Rubles 7.0 billion
loss under international accounting standards. 180
Most losses stem from long-distance and suburban passenger transportation
services. Profits have increased from freight services, but losses from passenger
services have also increased (Figure 8). RZhD knows this is unsustainable, and is
emphasizing reforming passenger transportation, as described above.
4.3 Asset Condition
Reforms have faced challenges in bringing substantial new investment to the
Russian railway industry. Asset investment still lags depreciation by a wide margin
(Figure 9).
180 Regulatory Reform of Railways in Russia, (OECD, European Conference of Ministers of
Transport), p. 38
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