Cumulative Effect from Operation of Freight Cars with Increased Load Capacity to Exceed RUB 1 Trillion by 2025 End

Based on INFOLine’s recent research "Evaluation of Operation Effects of Freight Cars with Increased Load Capacity on the Rail Market of the Russian Federation. 2017 and 9M 2018 Summary. Estimates up to 2025", the cumulative effect from the operation of 25-tf innovative rolling stock on the Russian GDP in 2013–2018 exceeded RUB 130 billion. The nature of the effect is the higher capacity of innovative cars that allows increasing freight exports under the conditions of limited infrastructure of the Russian railway. The total extra (carried using the increased load capacity) volume of coal exported by heavy haul trains over 2013–2018 amounted to 29 million t.

Using innovative cars has had a variety of supplementary effects on the country’s economy:
- The Russian Railways’ operation network reliability growth due to the increased run between repairs (8 years or 1 million km instead of 3 years and 210 thousand km for standard cars), increased life of structural elements (3.0–3.5 times longer) and increased length of warranted sections without inspections (up to 6,000 km);
- Reduction of Russian Railways’ infrastructure maintenance costs by RUB 7.5 billion in 2017;
- Russian Railway received an additional RUB 1.0 billion of loaded tariff revenue.
As a result of using innovative cars, coal companies save an average of some RUB 200 per ton when transporting their freight between Kemerovo Oblast and the Far East ports, which strengthens the competitiveness of Russian coal in the world’s markets, and creates opportunities for more investments into the expansion of coal production and export capacities.
The use of 25-tf innovative cars in 2017 allowed increasing coal exports by 9 million t, which resulted in more than RUB 1.6 billion of taxes (MET and profit tax) paid to the budget. By 2025, this figure will exceed 25 million t, and the effect from increased tax revenues coupled with the implementation of investment programs of coal companies, will total up to RUB 5 billion per year.
The cumulative effect from boosting coal exports by using 25-tf freight cars with increased load capacity in heavy haul trains will exceed RUB 1 trillion by 2025 end, and this, excluding other accompanying benefits for the Russian economy surging from lower RZDs expenses on maintenance of railroad infrastructure and locomotives, extra income to the federal budget owing to higher tariff revenue and profits received by RZD, and larger tax payments (VAT, MET and income tax) from coal companies and other shippers.
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