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Friday, May 22, 2009

Russian Railways to set up Second Freight Company

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THE Board of Russian Railways (RZD) has approved the creation of the so-called Second Freight Company, which will take over the bulk of RZD's remaining freight wagon fleet. "The RZD Board unanimously approved the establishment of a second freight company," says Mr Vladimir Yakunin, president of RZD. "We have a tight timetable: all the documents should be ready by the end of 2009 or early 2010 at the very latest." RZD wants the Second Freight Company to being trading in the first quarter of 2010.
When the company is formed, private business will be able to obtain a minimum 25% stake. An IPO will follow in 2011 at the earliest.
Under the plan, RZD's remaining freight wagon fleet will be dealt with as follows: 217,000 wagons will be transferred to the Second Freight Company, 60,000 wagons will be transferred to Freight One, which was set up in July 2007, 32,000 wagons will be scrapped, and RZD will retain 30,000 wagons for its own needs.
As a result, Freight One will own 266,000 wagons giving it a 27.5% market share, the Second Freight Company will have between 265,000 and 283,000 wagons giving it a market share of between 27 and 29%, and the private owners, of which there are around 2000, will have 430,000 to 450,000 wagons giving them a 44% market share.
RZD plans shortly to send proposals to the Ministry of Transport and other federal authorities for the establishment of a regulatory framework, technical standards, and rules to ensure the effective functioning of the reformed railfreight market in Russia. RZD wants the new rules to be in place by the time the Second Freight Company is formed.