President of Russia Vladimir Putin: Mr Belozerov, let’s discuss your company’s performance results. You have the results for how many months now?
Russian Railways CEO Oleg Belozerov: 10 months.
Vladimir Putin: Ten months. Have the loading levels increased?
Oleg Belozerov: Loading is up if you look at different months. There was a decline during the last two months. Cargo turnover is also up by almost 1.5 percent, and all major transport figures are up as well.
Good and stable trends have taken root in passenger transport, as I regularly report to you. Over the past 10 months there was an increase of 4.3 percent. However, we witnessed a decline over the past two years. Last year, there was an increase in long-distance train service. Now, we are about to have an increase of almost one percent in commuter and long-distance service. Commuter train numbers are very good.
In September, you opened the Moscow Central Ring railway line. We planned to reach 225,000 in daily passenger traffic by the end of the first year. A few days ago, there was an all-time high of 299,000 passengers a day, and the demand is rising. As I have reported earlier, we have all the technical capabilities in place. We will try to reduce the waiting time and add more cars to the trains. This is a good result, a good start.
Vladimir Putin: It’s a good project.
Oleg Belozerov: Very exciting.
With regard to long-distance service, government rebates provided to children aged 10 to 17 also yielded a good result with the number of passengers growing by 16 percent. Increasing the speed of Lastochka trains also gave us an additional 23 percent this year.
The Sapsan train continues to break records with an additional 35 percent this year. There’s talk that the rides are becoming crowded, so it’s time to think about adding more trains. We keep track of international itineraries as well. In December, we will put in service trains with variable track width on the Moscow-Berlin route. It will be a short 20-hour ride.
This year, the Government has taken unprecedented steps to support passenger traffic. A resolution has been adopted to subsidise the reduced rate for railway commuter passengers in the form of coefficient of 0,01 to base rates (of payment for use of infrastructure) until 2030. A proposal to waive the value added tax through 2030 has been submitted to the Duma.
This creates a stable environment to expand commuter traffic. The situation is similar with regard to cancelling the value added tax for long-distance service. This will give us an opportunity to buy nearly 1,000 new cars every year starting next year. That way, we will upgrade the rolling stock in a major way.
We have identified a number of issues to focus on. We had a problem with advance ticket sales. Previously, we were not able to sell tickets 60 days before the departure, so we were selling the bulk of the tickets 45 days in advance. On December 11, almost all long-distance service will start selling tickets 60 days in advance, and we will then increase that to 90 days.
Electronic sales are also on the rise with almost 40 percent of the tickets being sold online.
Vladimir Putin: That’s a nearly 20 percent increase in a matter of four years.
Oleg Belozerov: Yes, you are absolutely correct. That’s a spectacular increase.
Just a few words about freight traffic, if I may. We plan to see an increase across all conventional indicators before the end of the year, including loading and tariff cargo turnover, so the situation is stable in this area.
On a separate note, I would like to focus on the way we work to streamline our costs. As I reported earlier this year, we found ways to reduce costs by more than 40 billion rubles this year. Today, we have already arrived at almost 65 billion in savings. We keep working on that in all areas, including speed.
In a matter of one year of operations, we have saved over 100 billion rubles. This represents one month of Russian Railways’ expenses, and we did so without any decline in the quality of service precisely due to employing different mechanisms.
There’s another key factor for us: we are not worsening the condition of our infrastructure, but have instead begun to improve it. The key benchmark which you noted — productivity — is up 5 percent.
We have a date to mark today. We saw the termination of this year’s …
Vladimir Putin: Agreement.
Oleg Belozerov: Yes, the collective agreement with our social guarantees. Today, we signed this document, which is most important for us, for the next three years. We now have all the good things that we had in the previous collective agreement preserved for the next three years. Now our employees, including former ones, have a full package of guarantees. Guarantees to former employees are listed separately.
Vladimir Putin: Do you have a deal with the unions?
Oleg Belozerov: We do. Our colleagues, who have participated in such negotiations for many years now, are saying that the negotiations were constructive, and we managed to quickly find solutions to the most challenging issues. So, we signed the agreement together with the union leaders. Our colleagues had positive comments on our work.
Vladimir Putin: What is the average pay?
Oleg Belozerov: 47,180 rubles, more than it was. As I reported earlier, salary depends on productivity. When productivity goes up, salary follows. We are also keeping benefits in place. This is a key issue.
We are fulfilling all provisions of the investment programme. Acting on behalf of [the President], we promptly implement all projects, such as upgrading the Trans-Siberian and the Baikal-Amur railways, and southern directions.
On a separate note, we are expanding and renovating railway infrastructure near the ports of the Azov Sea and the Black Sea, including near the Crimean Bridge. Work is on schedule and properly funded.
In closing, Mr President, Russian Railways will complete all projects on time.
Vladimir Putin: Good.