Tariffs

Domestic tariffs for open and general carriages are regulated by the government represented by the Federal Tariff Service (FTS) and are set in accordance with the Tariff Guidelines approved by FTS decree 156-t/1 dated July 27, 2010, which is indexed annually. Annual indexation of passenger service tariffs depends on the overall macroeconomic situation, Ministry of Economic Development’s data on income growth and inflation rate.

The tariffs in the open and general carriage segment are not sufficient to cover the reasonable costs that the carries who are subject to the regulation have to bear and are subsidised from the state budget.

At the same time, under item 5 of the List of Works (Services) Done (Provided) by Natural Rail Monopolies Whose Tariffs, Fees and Charges are Regulated by the State, as approved by RF Government Decree No. 643 Regarding State Regulation of and Control Over Tariffs, Fees and Charges for Works (Services) Done (Provided) by Natural Rail Monopolies dated August 05, 2009, JSC FPC may set tariffs for sleeping cars and compartment carriages in its internal guidelines. Tariffs for travelling in carriages of these two classes are reasonable in terms of business costs.

Moreover, the current legislation authorises tariff differentiation subject to the transportation process conditions that affect the amount of costs and revenues of companies under regulation (item 11 of the List of Works (Services) Done (Provided) by Natural Rail Monopolies Whose Tariffs, Fees and Charges are Regulated by the State, as approved by RF Government Decree No. 643 dated August 05, 2009); this provision was used to develop of system of indices designed to adjust tariffs for domestic rail service based on calendar periods.

The purpose of this approach is to compensate for fluctuations in demand for long-distance passenger service in order to reduce the costs that the carrier has to incur to keep a spare fleet of carriages and locomotive crews and, through this, ensure service availability during peak periods; when it comes to passengers, they can benefit from lower tariff during periods when the demand is weak.