The Board of Directors of Russian Railways (RZD JSC) has approved a package of documents on the establishment of a RZD’s subsidiary, the Second Cargo Joint Stock Company, RZD’s press service said.
"At a meeting of the Board of Directors it was decided to establish the Second Cargo Company. The company will be one of the largest in Russia – it will control about 20% of the freight market. Eventually, Russian Railways will turn over 156,000 freight cars of its fleet to the subsidiary,” the press service quoted RZD Board Chairman Alexander Zhukov as saying.
"The decision to establish Second Cargo Company was made as part of structural revamp of the rail transport and, in our opinion, is one of the most significant events in the third phase of reform. We expect that the payback period, we have projected, is to be kept (8 years) and the ratio of income and expenditure turns out positive for us," President and CEO of Russian Railways JSC Vladimir Yakunin said.
The formation of a system of electronic documents for Second Cargo Company has been under way, PortNews IAA reports.
Emergence of freight operators with its own rolling stock for rivalry in the rail transportation sector had been provided in the Program of rail transport structural reform and the target model for the market of rail traffic.
Second Cargo Company is created as a universal rail network operator of its own rolling stock. The company will be engaged in carload consignment and shuttle train traffic across Russia. Besides, freight forwarding and other services are also possible.
The founder of Second Cargo Company is the RZD JSC (100% - 1 share). Ownership interest in a non-profit organization Zheldorreforma - 1 share.
The authorized capital of SCC JSC will be 46.4 billion rubles formed through the transfer of 156,414 freight cars of RZD’s fleet and the RUB 0.2bn fund.
The total rolling stock in operation by Second Cargo Company will be 180,142 cars (including 23,728 railcars leased by RZD, to be transferred under a sublease contract).
The formation of SCC will not change the structure of clients of rail traffic services. The biggest customers will be industrial and commodity companies - coal, steel, oil holdings, construction companies and producers of mineral fertilizers.
At the starting phase of its activities (from 2010 to 2012) the SCC will focus on price strategy, setting its prices below the market average level.
The SCC's share in railway freight turnover is expected to reach by 2015 roughly about 22%.
The RZD subsidiary’s stock will be offered for sale after federal authorities establish the rules and forms of private investors participation in the company's capital.