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Thursday, May 23, 2024

Russian Railways not impressed by UK privatisation

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The 8th rail business forum for Russian gauge railways (1520 mm) has opened in the mountain resort of Krasnaya Polyana – the location of Russia’s 2014 Winter Olympics. Writes David Shirres from Alpika

Yesterday’s (May 30) opening session debated whether railways should be vertical integrated. Vladimir Yakunin advised that Russian Railways had studied models of railway operation worldwide to assess what was best for them. He was convinced of the need for a system wide approach he did not think was possible with full scale liberalisation as in the UK where the lack of integration gave a 40 per cent increase in costs compared with other models. Yakunin also noted that the French were moving away from vertical separation.

Other speakers included Dietrich Moeller of Siemens, Alexander Hedderich, CEO, DB Schenker Rail, Henri Poupart-Lafarge, President, Alstom Transport and Francis Fukuyama, political scientist. Moeller also was convinced of the need for vertical integration to ensure an overall system authority which would, for example, ensure power supplies could accept regenerative braking.

Hedderich and Poupart-Lafarge were less adamant. Hedderich felt the correct model depended on the circumstances of the country concerned. For Germany he felt the concept of seperate businesses within an overall holding company worked well. Poupart-Lafarge advised that whatever the model it did not detract from the success of Alstom train projects.

Last to speak was Fukuyama whose main point was that the issue was not the degree of state involvement but the quality of state governance, something that is clearly relevant in the UK with its recent West Coast franchise experience.

Although Russia has still to decide how it will re-structure its railways to best attract private finance, Yakunin indicated that he favoured the German model.

1 COMMENT

  1. Most of these European companies, DB Schenker in particular, have done very well “thank you” out of UK rail privatisation, so of course they have no grounds to say the system is wrong.

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