15 october 2011

Prime Minister Vladimir Putin meets with Russian Railways CEO Vladimir Yakunin

Participants:
Vladimir Putin drew Vladimir Yakunin's attention to existing problems in several regions, the transport of harvested crops and other goods and difficulties in dispatching. Accordingly, Putin instructed Yakunin to rectify the situation in the most expeditious manner.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Yakunin, you know about the problems that we are having today with transporting cargo – and the miners have also complained. Yesterday, Mr Medvedev and I attended an event dedicated to Agriculture Workers' Day. And people approached us with problems associated with harvest transport from different regions of the country. One participant spoke particularly emotionally about the problems in Krasnoyarsk. But the problem is not only in Krasnoyarsk. Other regions have similar problems.

Today, Russia has a larger fleet of rail cars than the Soviet Union, but we still carry less cargo. And there are also problems of a clearly systemic nature. These are associated with reorganisations and changes in dispatching. This situation needs to be corrected in the most expeditious way. You know that the appropriate decisions have already been made at the governmental level by the Transport Ministry. You need to retrieve the units of rolling stock that were leased through your affiliates – a total of about 200,000 (approximately 180,000). Of course, this needs to be done in the correct market way, so private companies do not bear losses. Meanwhile, the appetite of private companies also needs to moderated.

Russian Railways itself must act in a more timely manner. The Tariff Service has been instructed to calculate an appropriate rate so no private company bears any losses. Russian Railways bears no losses, but instead operates with a profitability rate of at least 10% – and maybe a little more – somewhere around 15%. However, work must begin now. If necessary, we will amend the current legislation in terms of the regulatory framework, the relevant government resolution and even the law. But I reiterate, we must act swiftly and now. There is a proposal to designate a tariff corridor and grant Russian Railways the right to respond quickly to changing market conditions within this corridor. This will all be done, but I repeat for the third time that you have to start this work immediately and “expand” the situation.

Therefore, I ask you, just today or tomorrow to resolve the problem in the entire rail system, using Krasnoyarsk as a test case. Go to Krasnoyarsk, make an onsite review of the situation and take the necessary operational decisions based on the changes that the government made to the existing regulatory framework. Clearly, you should prepare for the trip, so it is not necessary to go there immediately. It is necessary to prepare for this event, but you should be there today or tomorrow.

Vladimir Yakunin: Understood, Mr Putin. Everything will be done. I want to thank you for your prompt response to our appeal. Indeed, two important documents have now been adopted – a Transport Ministry order and an executive order from Sergei Ivanov concerning the normalisation of the operational environment to manage traffic in the railway system. We see these problems, and we have discussed these issues with the ministries involved. Of course, I'll leave immediately. As you said, I'll issue instructions to assemble a meeting with cargo owners who are experiencing difficulties and the operators of private rail cars in Krasnoyarsk. And on Monday or Tuesday, I'll report to you on the results. But I can tell you, in Kemerovo, for example, the day before yesterday we loaded 8,016 cars. This is the highest number of loaded cars. This is already the reaction to the decisions being taken. I hope that we can normalise the situation.

Vladimir Putin: And I hope that next time, you will not wait for some outside signals, but will monitor the situation closely yourselves and respond promptly.

Vladimir Yakunin: Yes, sir. Thank you.