MOSCOW. Sept 26 (Interfax) – Russian Railways’ (MOEX: RZHD) (RZD) 30-billion ruble subsidy will not be increased in 2015 thanks to a 10% tariff indexation, Russian Economic Development Minister Alexei Ulyukayev told journalists.
“This [10% tariff indexation instead of 7.5%] does not mean that subsidies will be reduced, this means that subsidies won’t be increased,” he said, adding that initially the company insisted on additional subsidies.
Ulyukayev said that when considering the issue of increasing subsidies, the matter concerned both long-distance passenger traffic and the company’s balance as a whole. The minister said that the company insisted on keeping the tariff indexation at 7.5% next year, but another point of view was supported.
Ulyukayev said RZD’s subsidy consists of two parts: 25 billion rubles for commuter and long-distance services and also 30 billion rubles for the company’s general balance sheet.
In a recent letter to the president, in addition to a request for 10% tariff indexation, RZD chief Vladimir Yakunin asked for a subsidy of 45 billion rubles to enable the company to break even next year.