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131
The war in Ukraine is leading Russian Railways to financial collapse (www.railwaypro.com)
submitted 1 day ago by Sepia@mander.xyz to c/europe@feddit.org
23 comments fedilink hide all child comments
 

cross-posted from: https://mander.xyz/post/45242789

...

Russian Railway, which operates approximately 85,000 km of railway, is going through a crisis that has prompted Russian authorities to consider exceptional measures to avoid default, according to an analysis published by Europa Liberă. ...

Russian Railways’ total debt has reached approximately 4 trillion rubles (equivalent to about USD 50–51 billion, EUR 43 billion), at a time when revenues have been affected by the slowdown in the war economy and the highest interest rates in two decades.

The company, which has approximately 700,000 employees, is heavily exposed to state-owned banks, particularly VTB, and its inability to meet its financial obligations could have a knock-on effect on the Russian banking system, several analysts warn.

“This crisis at Russian Railways is one of the factors contributing to accelerating inflation in the Russian economy,” said Russian economist Igor Lipsiț, quoted by Current Time. According to him, falling revenues, rising tariffs, and inflationary pressures directly affect the population and companies dependent on rail transport.

The war in Ukraine, a systemic shock for the rail operator

The invasion of Ukraine was a systemic shock for Russian Railways. The prioritization of military transport, imposed by the government starting in 2024, has seriously affected trade flows and the punctuality of civilian deliveries.

...

In an attempt to stabilize the financial situation, the Russian government has ordered the sale of the Moscow Towers office complex, a 62-story building in the Moscow City financial district, purchased by Russian Railways in 2024 for approximately 193 billion rubles (about USD 2.4 billion), according to the Ukrainian portal UNN.

...

The Moscow authorities are considering several options to support the company, including:

  • increasing freight transport tariffs;
  • increasing state subsidies;
  • tax cuts;
  • using reserve funds;
  • converting part of the debt into shares, which would give state banks direct stakes in the company.

...

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[–] JensSpahnpasta@feddit.org 4 points 11 hours ago

What this also does mean: Russian Railways will not invest as much into their infrastructure, because they do not have the money. This might work for some while, but there will be that bridge that needed to be replaced back in 1995. The much needed new line will not be build. Facilities will rot and disintegrate. Maintenance is not being done. Investment in new trains will be postponed. It will work for a while and then slowly start to disintegrate