Rates of Russian Railways should be held to ensure return on investment in river ships construction - Vladimir Putin

The rates of Russian Railways should be held to ensure return on investment into construction of river vessels, RF President Vladimir Putin said at the Congress of the Russian Union of Industrialists and Entrepreneurs.

“River vessels have been built and then Russian Railways make a series of decisions to reduce rates for railway transportation and everything sinks. An agreement with the Government should have been concluded during the construction of vessels. The Ministry of Economic Development should apply the mechanism of holding the rates during the payback period. Representatives of the Government in Russian Railways should have told that”, said Vladimir Putin. The President emphasized the necessity of such a mechanism.

Earlier, by the beginning of the summer navigation season of 2017, Russian Railways offered a 25-pct discount on the use of railway infrastructure for transportation of oil products from the central Russia to the southern ports. The players of the river transportation market say that measure let the railways take over additional volumes of cargo from the rivers. To compete with the railways, shipping companies have to reduce rates. That entails difficulties in servicing loans raised for fleet renovation and does not let ship owners invest more in fleet development. Hence the negative impact on shipbuilding as well.