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Electrification[edit]
Main article: Railway electrification in the Soviet Union
While the former Soviet Union got a late (and slow) start with rail electrification in the 1930s it eventually had success in electrification in terms of the volume of traffic under the wires.
Russian Federation (1991 to present day)
Main article: Rail transport in Russia
Following the Collapse of the Soviet Union its railway system broke up into national railway systems of various former Soviet republics. Due to the ensuing depression, Russian freight traffic fell by 60% and has (as of 2010) not yet fully recovered.
In 2003 a vast structural reform was implemented in order to preserve the unity of the railway network and separate the functions of state regulation from operational management: On 18 September 2003, Decree No.585 of the Russian Government established the Russian Railways Public Corporation with state holds 100% of the shares.
The Cape gauge railway system of Sakhalin is being re-gauged to 1,520 mm (4 ft 11 27⁄32 in).
The current CEO of the company is Vladimir Yakunin. There are plans for partial privatization of the company in the future in order to raise much needed capital from the sale of shares. In 2009, Russian Railways stated that it expected a loss of 49.7 billion rubles in the year, compared with a profit of 13.4 billion rubles in 2008, and that it planned to shed 53,700 jobs from its workforce of 1.2 million.[13]
In 2007, as part of a liberalisation process, Russian Railways established First Freight Company which holds a large number of freight wagons; in 2010, it was announced that Second Freight Company would be established, and remaining freight wagons transferred to that.[14][15]
In July 2010, RZD signed an agreement for Siemens to provide rolling stock (240 EMUs) and upgrade 22 marshalling yards.[16]
Economic history Government ownership
Moscow to St Petersburg Railway, 1857
The first initiative in developing railways came following a meeting called by Tsar Nicholas I held on 13 January 1842 where he announced that the state would build the St Petersburg-Moscow railway. This decision came about after seven years of consideration. With characteristic slowness in committing himself, Nicholas I nevertheless proceeded with determination, aiming to overcome problems relating to having his capital some distance from the centre of his empire. Built in addition to the roads and canals that previous generation had built to link the two cities, Nicholas I envisaged that the railway would provide a more reliable method of transport particularly during the climatic extremes of summer and winter. Although influenced by military considerations, the railway would help bring food grown in the South to the less fertile northern areas. The plan for this first railway also offered the possibility of creating a network which could extend to the Lower Volga and the Black Sea, developing Moscow as a railway hub similar to Chicago in the United States.[17]
Due in part to the poor financial state of the Tsarist government and their inability to finance railroad construction, by the early 1880s all railroads were private companies.[18] But then as private railroads got into financial difficulty, the government took over some of them, resulting in mixed system of private and government railways. However, the government had guaranteed payment of interest and dividends on the securities of the private railroads resulting in a strong incentive for government takeover of failing railroads.
Sergei Witte was able to turn around some money-losing railroads and make them profitable. The remaining private companies had strong incentive towards more efficient operation in order to avoid nationalization. The result, according to one observer was that: "Russian railroads gradually become perhaps the most economically operated railroads of the world.".[19] Profits were high: over 100 million gold rubles a year to the government (exact amount unknown due to accounting defects).
After the Russian Revolution (1917) all railroads become government owned by the Soviet Union. During the earlier years, the Soviet railroads were financially in the red,[19] but by 1965 they returned a profit to the Soviet Government of 13.3% on their capital investment.[20] By 1980 profits had nearly halved to 7.1%.
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