Andrey Tsyganov told at OECD how competition is developed in Russian railways

On November 28, 2016 the Competition Committee of the Organisation of Economic Cooperation and Development (OECD) organised a roundtable «Innovations and Competition in Land Transport». The Russian Federation was presented at the meeting by the delegation headed by the FAS Russia’s deputy head Andrey Tsyganov.

The topic was chosen by the international organisation due to the fact that competition agencies today are facing a number of challenges brought about by recent institutional changes and technological developments in land transport, in both passenger and freight markets.

Among the experts of the meeting were Mr Dirk-Jan de Bruijn (Director, Traffic Innovation Centre), Mr André Schwämmlein (Founder and global MD, Flixbus) and Steve Perkins from the International Transport Forum, a sister-body of the OECD.

In the frame of his speech at the meeting Mr Tsyganov told that the new era of regulation and development of competition in the railway sector in Russia started in 2001 with the adoption of the Resolution of the Government of the Russian Federation "On Structural Reform Program for Railway Transport". One of this Program’s goals was the development of a competitive sector in the field of rail transport, including the creation of commercial companies.

Andrey Tsyganov told to the audience there are currently 400 operators and 1700 owners of wagons participating in Russian railway transportation. He emphasized that there are also more than 170 private locomotives operating, which contributes to the development of full competition among suppliers of freight services. This is also ensured by the operation of both private and public subsidiaries of RZD. In this situation protection of non-discriminatory access to the railway infrastructure by main actors is highly important in the eyes of the sector’s regulators and is one of the FAS Russia’s objectives.

Mr Tsyganov also shared with the audience particularities of the tariff regulation in the Russian freight railway transportation. He told there are several components that the price on freight transportation by railways includes and that prices on all of these components are determined by the FAS Russia retaining the power of a price regulator.

While providing concluding remarks Alberto Heimler, president of the OECD Working Party on Competition and Regulation thanked Mr Tsyganov’s for providing information on recent developments in the Russian railway sector. He expressed his positive attitude towards the fact that in Russia a considerable breakthrough was achieved not only on the market of railway carriages but also on the market of provision of locomotive force.

Steve Perkins from the International Transport Forum, a sister-body of the OECD also covered the Russian experience of establishing competitive environment in the railway sector. After telling that at the beginning of the reform most topical issues in Russia were providing a more open access to carriages, he then agreed with Mr Andrey Tsyganov’s statement that reform of Russian railways is a long-term process experiencing a gradual enhancement of competition.