OREANDA-NEWS. October 12, 2009. The RZD management discussed at a meeting one of the most important issues in the reform of passenger transport services – the creation of an RZD subsidiary handling long-distance passenger transportation, reported the press-centre of RZD.

"In creating this company, the goal is to organize an effective business engaged in long-distance passenger transport, based on cooperation between the new company and government authorities," RZD Vice President Mikhail Akulov told the session. The subsidiary will function as an independent market entity, and 100% minus one share of its equity capital will be owned by RZD. Equity capital will total 136.8 billion rubles.

The Federal Passenger Company (FPC) will be created on the basis of assets owned by the FPD (Federal Passenger Directorate, a subsidiary of RZD). Currently, the organizational structure of the FPD includes 16 regional directorates, 43 passenger carriage depots, 29 carriage standing areas, 15 railway agencies, and two directorates for passenger services. The total FPD workforce is 98,200 people. The FPD owns 24,691 passenger carriages. In setting out the key figures for the activities of the new company, two development scenarios have been drawn up: a baseline scenario and an ambitious scenario. To provide sufficient resources to meet the planned sales volume, draft investment programmes have been developed.

The volume of investment in the period from 2010 to 2020 will be 257.4 billion rubles under the baseline scenario, and 442.5 billion rubles under the ambitious scenario. The main areas of investment in the FPC will be the renewal of rolling stock. Under the baseline development scenario, 1,540 carriages are planned to be bought over the next three years, and 4,080 carriages in 2013-2020. Under the ambitious development scenario, 1,698 carriages will be bought in the first three years, and 6,864 carriages by 2020. Two hundred RIC-sized carriages will be purchased from 2011 to 2014. The vice president of RZD said the new company’s marketing strategy will vary depending on market segment. In the field of international transportation, the strategy will be aimed at the economically effective geographical diversification of the FPC’s market, and envisions an optimized route network, flexible reactions to shifts in demand, and a geographical expansion of start and end points of routes, based on analysis of passenger flows.

"Under the business plan that we have developed, the subsidiary to be created will be able to gain a stable position on the market of long-distance passenger transportation, and will be able to conduct independent economic activities in all target areas of its work, yielding an aggregate profit," Mikhail Akulov said. The documents for the creation of the RZD subsidiary for long-distance passenger transportation will be presented for the Board of Directors’ consideration.