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Business news, 15.08.2003 17:45

Rail Passengers To Have Private Option

During and after the Soviet period, only the Railways Ministry and the regional companies that it owns and runs - such as the Oktyabrskaya Railway company, which operates lines running out of and around St. Petersburg, including that to Moscow - were authorized to use the country's railway infrastructure for passenger travel. Since the collapse of the Soviet Union, private companies have been allowed to offer cargo services.

First Passenger Company was set up in June 2003 by two St. Petersburg companies, Evrosib, which presently provides rail cargo service Okdial, which supplies the railroad with packages for passengers including soap, shampoo, towels and bedding.

According to Golubtsov, the company plans to invest around $50 million in purchasing four trains, including two that will operate daily express runs, much like the R-200 daily express that presently operates along the St. Petersburg-Moscow route and two that will run overnight. Golubtsov said that the trains will have 16 or 17 carriages and will begin operating next summer.

But Gennady Venediktov, the general director of Okdial, was even more upbeat about the overnight service in a telephone interview on Tuesday, saying that the company's first train working this run may make its maiden trip in October. He said that the daily express trains, which will charge higher fares than those charged by the ministry and which are targeted at a more upscale market, may not be ready to begin operations for another two years.

Venediktov added that the demand for passenger service on the St. Petersburg-Moscow line is high and that the company will be able to find a profitable niche in the market.

According to Golubtsov, First Passenger Company plans to purchase passenger carriages from the Tver Carriage-Building Factory.

The next step for First Passenger Company is to sign a basic agreement with the Railways Ministry allowing it to operate a passenger service, a step that ministry representatives say should be handled relatively quickly.

"Any company may apply for the right to organize private railway transportation," Konstantin Pashkov, the spokesperson for the Railways Ministry, said in a telephone interview on Wednesday. "If there is no evidence that this won't negatively effect passengers' rights, the permission will be granted."

Representatives of both the Railways Ministry and Oktyabrskaya Railway say that they do not expect that the launching of the project will mean any loss in their revenues. Golubtsov pointed out that First Passenger Company will have to pay for the use of Oktyabrskaya's tracks.

The St. Petersburg-Moscow route carries the largest volume of passenger traffic in the country and the passenger levels this summer are 7-percent higher than those for the same period last year, according to information from the Oktyabrskaya Railway press service. Oktyabrskaya also says that it plans to run an additional 11 trains operating both ways daily for the last 10 days of August.

In the first seven months of 2003, Oktyabrskaya Railway carried 7.56 million passengers on its regular lines - is 2.6 percent more than for the same period in 2002 - and another 11.046 million passengers on local commuter trains.

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