Staunton, November 4 – Russian trains now travel at “almost the same average speed” they did in the middle of the 19th century, and Russian Rail remains a Soviet-style monopoly for all the talk about innovations over the last 15 years, according to a new study, which points to these shortcomings as a major reason for a new effort at reform.
The average speed on the very first Russian railroad, which was opened in 1837, was 51 kilometers an hour, a speed that Russian trains moved until a decade ago, when after several reforms, the speed for passenger trains was boosted to 57.4 kilometers an hour by 2010 (profile.ru/economics/item/100914-vagonchik-nikak-ne-tronetsya
Not surprisingly, everyone agrees all this must be changed through some kind of radical reform, Yekaterina Butorina, Aleksey Mikhaylov and Aleksandr Barinov write in “Profile;” but there are serious disagreements about what that reform should look like, how it should be paid for, and with what it should begin.
Some believe that Russian Rail can reform itself especially since it now has a new head; but others argue that it must be broken up either regionally or functionally. Vladimir Putin has indicated that he favors “demonopolization,” but he has called for that before and it has not yet happened.
Since 2001 when the reform of the branch began, a great deal has happened but not the final stage. Private firms gained control of much of the rolling stock, prices were liberalized, and government subsidies were restructured. But competition has not been created and investment has therefore not followed in the way many hoped. And Russian Rail remains a state monopoly.
Those who want to see it broken up and competition established point to the rapid growth of US rails as a result of competition, but those who favor a monopoly approach point to the degradation less of the rolling stock than of the rails themselves, the correction of which they say requires state intervention.
At present, the three writers argue, there are two basic models for Russia to choose from: the European with divided infrastructure and elements of both monopoly and market operations, and the American which would hold the rails themselves in the hands of the state but allow vertically integrated companies to compete for passengers and freight.
It is impossible to say which strategy Moscow will choose, the three writers conclude. And the fact that each side has a case may mean that the central government will simply delay taking any decision. But “sooner or later,” they argue, Moscow will not be able to avoid doing so if rails are to contribute to the economy rather than hold it back.