Leasing of Rolling Stock as an Anti-crisis Tool for Russian Railway Industry Development

The report of Vladimir Savchuk, Head of IPEM Railway Transport Research Department, "Leasing of Rolling Stock and Locomotives - 2014" Round table, Moscow, 26/02/2014

According to the “inertia scenario” of the Strategy for Railway Industry Development until 2030 (IPEM developed the Strategy commissioned by the Ministry of Industry and Trade in 2013) market volume of freight cars will come to more than RUB 600 bln in 2015-2020. Market volume of other types of rolling stock (locomotives, multiple units, maintenance vehicles, passenger cars) will amount to about RUB 540 bln, including market volume of locomotives – RUB 250 bln, passenger cars – more than RUB 200 bln, network maintenance vehicles – more than RUB 50 bln.

As the production level of railway industry manufacturers is decreasing, the development of leasing may positively influence not only the railway industry itself, but the whole Russian economy as well. Several millions of state expenditures on subsidies of leasing rates can result in several billions of budget revenues and cumulative effects for the economy. Development of leasing is one of the most effective anti-crisis tools for sustaining and increasing the output. Implementation of leasing services will help to solve the problem of traction rolling stock deficit in the short term.

Shunting locomotives is one of the most perspective segments for implementation of leasing services. RZD JSC is not the only consumer in this market; large manufacturing companies, with own network at production sites and shunting fleet are interested in obtaining shunters. Shunter market is relatively small, but there are a number of solvent businesses demanding to renovate their rolling stock. Leasing is familiar to them, and their managers are fully aware that leasing can optimize company’s investment and debt burden, decrease transport expenses. Leasing of freight cars has become a common practice, and its success will stimulate implementation of shunter leasing.

There’s also a new segment of leasing worth mentioning – leasing of renovated shunters. The renovating company buys the machine back from the manufacturing company, then performs the renovation, and again leases the shunter to the company. Today large Russian locomotive manufacturers and overhaul plants consider implementation of such leasing schemes.

If state grants subsidies to leasing rates it will effectively support Russian manufacturers of rolling stock when the volume of output is decreasing. It would also increase contributions to federal and regional budgets. State funding of rolling stock leasing will give an impetus to the development of domestic railway industry, unlike funding of aircraft leasing, which to a large extent supports foreign manufacturers.


Back to Rail Studies          Back to Main Page

For the full version of the study or any additional information please contact: +7 (495) 690-14-26,