First-class tariff

Federal Tariff Service (FTS) promises to make the situation with grain transportation clear in the nearest future. Recent meeting of FTS was dedicated to the issue if grain cargo should be transferred from the second to the first category of railway transportation. The decision should have been revealed last week. However, it has not been disclosed yet.

Second-class cargo

All railway cargoes are divided into three categories depending on which transportation costs are calculated. As PortNews IAA learnt from Russia’s Grain Union, transportation of grain is 30%-50% more expensive as compared with transportation of first-class cargo: coal, cement, slag, round timber, ore, sand etc. Grain is cargo of second category, which is more profitable for RZD OJSC. The second category includes cargoes, transportation of which is not of large-scale volumes as compared with cargoes of first category. However, largest operators of grain market assure that volumes of grain transportation are close and sometimes exceed those of the first category. According to RGU calculations, transportation of mortar sand from Novosibirsk to Vladivostok (5.9 thou km) costs RUR 927.01 per tonne, cement – RUR 1559.09 per tonne, while transportation of wheat will cost RUR 2373.01 per tonne.  

Lost possibilities

Market players think transition of grain to the first category could significantly expand the geography of transportations. As of today, there are regions in Russia with deficit of grain as well as the territories with excess volumes of grain. The only possible way of transportation is railway, however, the share of transportation costs increased 3.1 times from 2001. “cargo could be transported not only from southern regions but also from Voronezh, Saratov, Povolzje and Siberia,” Andrei Slavutin, RGU’s vice-president thinks. “However, high transportation costs close the above regions and they accumulate excess volumes of grain which are difficult to be sold at internal or external market”. Besides, there are grain transshipment facilities in the ports of Russia’s Far East. However, impossibility to arrange regular delivery of grain resulted in transshipment of only 5 thou tonnes of grain by all ports of the Far East.  Cases for transfer  

The issue of grain transfer to the first category have been discussed for a year already. The problem was first touched at the seventh International Grain Round in Sochi (held in 2006). Later the problem was raised by the ministries, Rf Government and even by RF President Putin. In March 2007 RGU forwarded an open letter to Dmitri Medvedev, the first deputy chairman of RF Government. The message was signed by 28 largest players of grain market. It revealed a number of reasons for transfer of grain to the first category of transportation.

If grain is transferred into the first category, RZD OJSC will loose RUR 1.5 billion per year. One of the methods proposed for solving the problem is compensation from federal budget. According to Andrei Slavutin, the loss is not very high for a proficit budget considering national project “Development of agricultural sector.” Besides, if the situation does not change, RZD OJSC may loose much more as grain exporters think it is more profitable to transport grain by motor transport. “Even considering high petrol prices this way of transportation is getting more profitable”, Sergei Shakhovets, Director of RGU information&analytical department, says.

Chausova Larisa