Due to Russia’s geography, rail transport is a key sector of the economy, providing for territorial integrity and a unified economic space, and is of critical importance for the state, economy, society and defense.
The rail industry is being reformed in accordance with the Program for Structural Reform of Rail Transportation, approved by Decree No. 384 of the Government of the Russian Federation of 18 May 2001.
The primary goals of structural reform in the rail industry include the following:
- Increase the sustainability, accessibility and safety of rail transport and the quality of services in order to provide for a unified economic space and national economic development
- Create a unified and harmonious national transport system
- Reduce the overall economic costs of freight transportation by rail
- Satisfy the growing demand for rail services
- Create a developed, competitive market of rail services as well as non-core activities unrelated to transport
- Enhance the global competitiveness of Russia’s rail industry in order to consolidate its positions on the Russian and international transport markets.
As a result of structural reform measures, the market of rail services has been divided into natural-monopoly and competitive sectors. Services involving the use of public rail transport infrastructure are in the natural-monopoly sector, regulated by the law Concerning Natural Monopolies. The state will continue to regulate freight carriage, long-distance passenger services and locomotive towing services in the potentially competitive (temporary monopoly) sector. Other types of rail service are in the competitive sector.
Ernst & Young has been active in developing and realizing a number of rail industry reform projects.