Russia is in shortage of new railroad wagons

By 2018, the fleet of freight wagons might be reduced by some 1 million cars falling to the numbers of 2010
Russia is in shortage of new railroad wagons
10 June 11:25 2016 Print This Article

In Russia will be soon a shortage of railroad wagons. According to the Institute of Natural Monopolies (IPEM) of the Russian Federation, their production has been constantly declining during the past five years. In particular, from 2012 to 2015, the production of carriages dropped by more than a half reaching only 29.2 thousand units by the end of 2015.

The trend is to continue also this year. In the first four months of 2016, the production of railroad wagons has already fell by some 3.5% compared to the same period of 2015 reaching slightly over 8 thousand units.

While the number of people working in the manufacturing and services relate to cars has substantially decreased by almost 22% over the past two years (by 8,4 thousand ppl), the average cost of a rail car increased  by over 29% at the same time span from 1,7 mln rubles to 2,2 mln rubles. That is mainly due to the price increase of primary materials, explains the report of the deputy head of the IPEM Vladimir Savchuk.

What is pivotal to this situation is that Russia holds a huge number of obsolete freight wagons. At the same time, the industry is not making on time to produce new railcars at the same pace as the old ones are getting removed from use. And their number is constantly growing especially starting from 2014 when the Russian Ministry of Transport has restricted the overextension of the life-cycle of the wagons, a senior analyst of the research and production corporation United Carriage Company (NPK OVK) Laysana Korobeinikova informed.

According to IPEM, after this restriction the writing-off started to exceed the supply of new cars to Russian Railways (RZD) by five times. Last year, 104 thousand freights were written off. In the first four months of 2016 the number stays at already 56,5 thousand units.  In total, according to the IPEM data, as for April 2016, the fleet of freight wagons consist of 1,111 mln units (comprising 492,4 thousand gondola rail cars). At this pace of write-offs and procurement, the fleet might be reduced by some 1 million cars by 2018 falling to the numbers of 2010.

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