Russia Faces Serious Railway Issue

Due to debts, investments in major projects have been cut fivefold.

The Russian plan to build railways in Siberia, along which Russian raw materials were planned to be exported to Asia, has encountered financial difficulties. This is reported by liga.net, citing the Russian publication Kommersant.

Investments in the modernization of the Baikal-Amur Mainline and the Trans-Siberian Railway in Russia are planned to be reduced fivefold - to $720 million (75 billion rubles). At the same time, expenses on developing approaches to ports in the European part of the Russian Federation will be practically frozen.

The investment program of the transport monopoly, which covers, in particular, expenses on capital construction, will be reduced by 37% in 2025.

Russian Railways' capital expenditures will be reduced from $12 billion (1.3 trillion rubles) to $8 billion (834 billion rubles), with almost the entire amount going to support the company's current operations.

The main problems for Russian Railways were debt and rising interest rates.

As of mid-2024, Russian Railways' total debt reached $24 billion (2.54 trillion rubles), and by 2025 the company's debt burden could grow to $37 billion (3.9 trillion rubles).

It is noted that next year Russian Railways will have to spend $6.62 billion (688 billion rubles) just on debt servicing, which is almost six times more than in 2023, and the company's profit could be halved to $780 million (81.6 billion rubles).

In addition to the growing debt, Russian Railways is experiencing an acute personnel shortage - there is a shortage of train compilers, car inspectors, and track fitters.

“Increasingly, the shortage of personnel not only limits but almost paralyzes the work of stations,” notes the head of the Russian agency Infoline-Analytics, Mikhail Burmistrov.

To cope with the situation, Russian Railways needs to raise salaries, but only $190 million (20 billion rubles) has been allocated for this purpose – five times less than necessary.

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