Railways enter the FNB – Newspaper Kommersant No. 191 (7392) dated 10/14/2022

The government is preparing to capitalize Russian Railways by another 217 billion rubles. in addition to the 250 billion rubles allocated in the spring. Funds can be allocated from the NWF and will be used to reduce the debt burden. According to Kommersant’s interlocutors, this decision has already been agreed. Thus, this year the monopoly will receive a record 467 billion rubles. from the NWF – more than half of the annual investment program. According to analysts, the debt burden of Russian Railways is at the maximum level, when interest payments already take away more than a third of EBITDA, and additional capitalization is extremely relevant, but it would be nice if it was allocated for the obligation to fulfill the most urgent projects, in particular, the purchase of traction and the expansion of the Eastern polygon.

Russian Railways can be capitalized for an additional 217 billion rubles. to reduce debt burden. According to one of Kommersant’s interlocutors, the capitalization has already been approved by Deputy Prime Minister Dmitry Grigorenko, who oversees the FNB. The secretariat of Mr. Grigorenko declined to comment. Two interlocutors of Kommersant confirmed that the decision had been agreed. In the Ministry of Economy, Kommersant was forwarded to the Ministry of Finance (they did not respond to Kommersant’s request) and to Russian Railways, where they declined to comment.

This year, the authorities have already poured funds into Russian Railways – for example, in April the government approved a contribution of 250 billion rubles. from the NWF to the authorized capital (see “Kommersant” from March 18 and April 10th). The funds were ordered to be directed to the modernization of the railway infrastructure of the BAM and the Trans-Siberian Railway, the development of the infrastructure of the Central Transport Hub, the purchase of traction and multiple unit rolling stock, as well as long-distance cars.

Thus, the additional capitalization from the NWF this year will total 467 billion rubles, which could cover 55% of this year’s investment program (847 billion rubles).

As Kommersant reported, in the summer of Russian Railways with the relevant departments, they discussed additional capitalization at the expense of those funds from the National Welfare Fund that were previously supposed to be allocated to finance the construction of exits from Yakutia: the need for them decreased after Elgaugol decided to build for the export of its coal volumes a separate branch to the Sea of ​​Okhotsk. Then it was about 188 billion rubles. (see “Kommersant” dated July 18). Whether these are the funds that are planned to be allocated now, Kommersant’s interlocutors do not explain.

The head of Infoline-Analytics, Mikhail Burmistrov, believes that reducing the debt burden is now very important for Russian Railways, since lending rates will increase in 2023, and Russian Railways has a very ambitious investment program. At the same time, it is not yet clear whether the debt financing obligations laid down in it are feasible and whether the increase in tariffs of Russian Railways, which significantly exceeds the inflation rate predicted by the Central Bank and the Ministry of Economy, will be approved.

Additional capitalization, according to the expert, is the most sparing option for the economy to attract financing, since a further increase in the burden on shippers will significantly complicate the formation of new export routes.

In his opinion, it is important to recapitalize Russian Railways with obligations to implement those projects that have the greatest synergistic impact on the country’s economy. This is primarily the purchase of traction, the formation of a serial order for models with replaced imported components, and everything related to the development of the Eastern test site, the load on which will grow rapidly in the face of increased secondary sanctions.

Elena Sakhnova, an expert on the My Investments channel, recalls that recently the head of the Ministry of Economy, Maxim Reshetnikov, speaking at the Federation Council, noted that Russian Railways does not have enough funds for capital investments. There are two sources of additional financing: investments of the shareholder (the state) or an increase in the debt burden. And the level of debt of Russian Railways, as Mr. Reshetnikov said, “is on the dangerous edge.” Ms. Sakhnova notes that it is impossible to increase the debt burden further: Russian Railways already pays about a third of EBITDA in the form of interest payments on the debt.

Natalya Skorlygina