FPC pays particular attention to the relations with regional authorities of the Russian Federation. Provision of excellent passenger experience and increased transport mobility of the population are a priority for the Company.
As part of this effort, FPC signed cooperation agreements with 23 Russian regions. The Republic of Ingushetia, Komi Republic, the Republic of Karelia and Kabardino-Balkarian Republic signed transport service contracts with the Company to provide for the compensation of the carrier’s revenue shortfall.
The lack of regulations allowing regional authorities to place orders for long-distance passenger rail services, thus providing for transport mobility of the population and supporting social stability, is a constraining factor for wider cooperation with the government.
FPC is actively involved in the efforts to optimise government subsidies for passenger services. A systemic solution would be to launch a long-term transparent subsidy mechanism to support transport services based on government contracts.
If the Regular Railway Passenger Services Bill is enacted, it will provide a legal framework for public passenger service contracts.
The bill aims to ensure:
A large step towards the introduction of government contracts for transport services is the Interregional Passenger Service Long Term Regulation Concept that establishes an effective subsidy mechanism to support interregional passenger services by different modes of transport.
The draft concept has been approved by Russia’s Ministry of Transport and is now under the consideration of the Federal Antimonopoly Service and the Ministry of Finance of the Russian Federation.
The Regular Railway Passenger Services Bill is planned to be submitted to the Government of the Russian Federation in 2016.
In 2015, FPC received a total of RUB 24.7 billion in government subsidies as a compensation for the revenue shortfall caused by the government regulation of the prices of long-distance fares for third-class and common carriages.
Russian school students are offered a 50% discount on fares for third-class and common carriages in passenger and express trains made up by FPC and running on domestic routes from 1 January through 31 May and from 1 September through 31 December.
The school student discount is also available for FPC carriages in trains originating abroad but applies only to the ticket component of the fare for travel in the Russian Federation. The ticket component of the fare, the seat and bed sheets in foreign carriages are payable in full.
Discounts are provided subject to the presentation of a certificate confirming school student status at the ticket office.
|Subsidies received from the budget||Actual losses||Shortfall|
|Subsidies to compensate Russian Government Resolution No. 207 dated 7 April 2007. for the revenue shortfall caused by the government regulation of the prices of long-distance fares for third-class and common carriages||23.3||24.7||24.7||0|
|Subsidies to compensateRussian Government Resolution No. 916 dated 21 December 2007. for the revenue shortfall caused by levelling fares for the passenger service from/to the Kaliningrad Region to/from other regions of the Russian Federation||0.78||0.92||0.92||0|
|Subsidies to compensateRussian Government Resolution No. 1172 dated 30 December 2009. for the revenue shortfall caused by the long-distance rail transportation of general education school students aged over 10 years in third-class and common carriages||1.52||1.65||1.65||0|
Pursuant to Instruction No. И-1263-у On the Reduction of Prices for Passenger Services between Kaliningrad and Russia in Third-Class and Compartment Carriages issued by the Russian Ministry of Transport on 25 December 2002, Decision of the Russian Government Commission on Railway Tariff Regulation (Minutes No. 14 dated 6 December 2002) and Federal Energy Commission Resolution No. 92-т/5 dated 17 December 2002, discounting factors are applied starting from January 2003 to fares for third-class and compartment carriages in long-distance trains running between the Kaliningrad Region and other regions of the Russian Federation to level them with fares for similar distances on domestic routes, thus ensuring equal transportation affordability for citizens of the Russian Federation. The revenue shortfall caused by the rate levelling is defined as a difference between the revenue the Company could have received without price levelling and the actual revenue it has received after levelling the rates for third-class and compartment carriages in all categories of trains. Subsidies are provided within available budget allocations subject to limits on budgetary obligations.
Foreign citizens are not eligible for the ticket price adjustment on the routes between the Kaliningrad Region and other regions of the Russian Federation.