The Russian government is discussing various ways to support state-owned railway company RZD, the country’s largest commercial employer, which has accumulated 4 trillion rubles ($50.8 billion) in debt, Reuters reported, citing two sources familiar with the matter.
The state-owned company Russian Railways, which employs about 700,000 people, has suffered a decline in revenue amid a sharp slowdown in Russia’s war-torn economy, while debt servicing costs have risen sharply due to a record-high key interest rate set by the central bank.
According to the sources, Moscow is discussing how to help the railways, whose debt is mostly to state-owned banks.
Raising fares, increasing subsidies, cutting taxes or even using funds from the National Welfare Fund are being discussed.
The rise in rail freight prices would hit Russian exporters of bulk goods such as coal, metals, petroleum products, grain and chemicals, which are already suffering from a slumping economy and high interest rates.
Russian officials met in late November to discuss the situation and are planning another meeting in December, according to one of the sources.
Some ideas that have not yet been discussed at the government level include preferentially reducing the interest rates paid by the company or converting its debt into shares – essentially giving some of it to state-owned banks.
One proposal was to convert 400 billion rubles of debt into shares. According to the source, this measure would save 64 billion rubles in interest alone over three years.
In its financial report for the first six months of 2025, the company reported net debt of 3.3 trillion rubles as of June 30, including 1.8 trillion in short-term liabilities. At the time, it was revealed that debt had increased by 0.7 trillion rubles in just half a year.
Russian Railways operates the third-longest railway network in the world after the United States and China.
It is unclear what the government’s final decision will be, as there are differences of opinion among the ministries of finance, economy, transport and trade, according to one of the sources.
Illustrative Photo by Ivan: https://www.pexels.com/photo/steam-train-in-winter-with-snow-covered-railway-12234433/
We acknowledge The European Times for the information.
