August M
Russia’s vast rail network, long seen as a backbone of the national economy, is under growing strain. Mounting debts and falling freight volumes have pushed the state-owned operator into severe financial difficulty.
In response, the government has stepped in with emergency measures aimed at keeping the company afloat.
According to WP Wiadomości, the Russian government has approved an unexpected rise in rail freight tariffs to support Russian Railways as it grapples with the economic fallout from the war in Ukraine. The company is reportedly burdened with 4 trillion rubles in debt and recorded its first annual loss since the pandemic last year.
Beginning March 1, freight transport rates will increase by 1 percent under a government decree. Officials said the measure is needed “to finance activities that compensate for expenses related to ensuring transport safety.”
Mounting pressure
As reported by The Moscow Times, Russian Railways sought urgent state assistance in 2024, requesting 200 billion rubles. The Finance Ministry approved only 65 billion rubles, forcing the company to scale back investment plans and begin selling assets.
Sergei Alexashenko, a senior researcher at the NEST Centre in London, described the situation starkly. “Russian State Railways is essentially bankrupt and has no chance of recovering on its own,” he wrote, adding that the authorities appear determined to rescue the company regardless of the cost.
Reuters estimates that the latest tariff hike could generate around 22.3 billion rubles in additional revenue.
Freight slump
Freight traffic has dropped sharply since Russia launched its full-scale invasion of Ukraine. WP Wiadomości notes that 2024 marked the steepest annual fall in 15 years, with the downturn continuing into the first nine months of 2025.
During that period, Russian Railways reported a net loss of 4.4 billion rubles. The company placed some employees on unpaid leave and began layoffs in October.
In response to the worsening outlook, the Kremlin is preparing a rescue package valued at 1.3 trillion rubles. The plan reportedly includes debt restructuring and asset sales.
Among the properties earmarked for disposal is a 62-story skyscraper in Moscow, purchased in 2024 for 193.1 billion rubles. The historic Rizhsky railway station building in the capital is also expected to be sold.
Sources: WP Wiadomości, The Moscow Times, Reuters
