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Russian Railways mulling acquisition of foreign design centers, railway operators — CEO

March 17, 11:53 UTC+3
The state monopoly plans to receive $218 mln from the National Wealth Fund in 2016
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© Yuri Smityuk/TASS

MOSCOW, March 17. /TASS/. Russia’s state-owned railroad monopoly Russian Railways is considering acquisition of foreign design centers and railway monopolies, President Oleg Belozerov said in an interview aired by the Rossiya-24 TV news channel Thursday.

"We’re likely to acquire something in certain countries. Probably, it will be design institutes holding licenses and certificates so that we could faster use our best practices. We’re also discussing a potential acquisition of an operator," he said.

The official also noted that the railroad monopoly is estimated to be worth from 2 to 4.5 trillion rubles ($65 bln) as of today.

"So far (the company is worth - TASS) from 2 to 4.5 trillion rubles, according to preliminary estimates based on balance sheet valuation while a more accurate market-value appraisal needs particular discussions," he said, adding that "the more efficient the company is the higher value it will have."

According to him, Russian Railways plans to receive around 15 bln rubles ($218 mln) from the National Wealth Fund for implementation of the Baikal-Amur Mainline (BAM) and Trans-Siberian Railroad construction projects in 2016.

"We plan to receive around 15 bln rubles worth of extra funds from the National Wealth Fund. We have around 45 bln rubles worth of NWF funds, which makes up 60 bln rubles. I think we’ll use around 140-150 bln rubles in this area this year," he said.

According to Belozerov, the company found an opportunity to cut the cost of its projects in the East operating domain by over 8 bn rubles last year. "Part of this year’s projects will yield even bigger savings," the official said.

In November 2015, Belozerov said the plan was to allocate 50 bln rubles ($729 mln) worth of funds from the National Wealth Fund for modernization of the two infrastructure projects in 2016. Meanwhile, Russian Deputy Transport Minister Alexei Tsydenov has said the company could receive up to 100 bln rubles from the National Wealth Fund for the East operating domain.

All in all, a total of 150 bln rubles is to be allocated for those projects from the National Wealth Fund, with one third already received by the company last year.

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