Russian Railways
The collapse of the Soviet Union in 1991 left Russia with 17 of the 32 regions that once formed the vast Soviet Railways network. By the mid-1990s, the Ministry of Railways was losing money and drowning in bureaucratic inefficiency. Public criticism grew as profitability fell to negative values. Vladimir Putin approved a radical reform shortly after his election in 2000. The state program for railway sector reform officially began in October 2003 when Russian Railways was established. A decree passed on the 18th of September 2003 separated infrastructure upkeep from train operations. This new company received over 95% of all assets belonging to the former Ministry of Railways. Federal Law on Railway Transport divided the old ministry into two distinct entities: the Federal Railway Transport Agency and Russian Railways. Gennady Fadeyev became the first president of this newly formed joint-stock company. Decree No. 585 later solidified RZD's status as a holding company controlling 63 subsidiaries. The reform required RZD to provide access to its tracks for other carriers while retaining dominance over long-distance travel.
Gennady Fadeev led the company from the 23rd of September 2003 until the 14th of June 2005. He was succeeded by Vladimir Yakunin who served until the 20th of August 2015. Oleg Belozyorov took over the presidency in August 2015 and continues to lead the organization today. The company underwent massive workforce reductions, shrinking from 2.2 million employees in the 1990s to just 934,000 people by 2012. In 2012, Russian Railways ranked among the three largest transport companies globally. A Reuters inquiry revealed procurement activities totaling $22.5 billion in 2012 were awarded to private contractors with no genuine operations. Some addresses listed on these tenders turned out to be private apartments or car repair shops. Allegations surfaced that shell companies conveyed billions of dollars to close associates of President Yakunin. Zheldoripoteka sold land plots near major railway stations to Yakunin's son. Far East Land Bridge also linked back to the president's family. On the 8th of April 2022, CMA CGM announced it would acquire Gefco SA from Russian Railways. The company maintains controlling interests in subsidiaries like Federal Passenger Company and TransContainer.
In 2003, RZD launched a project to replace narrow gauge tracks on Sakhalin Railway with broad gauge used elsewhere in Russia. This conversion was formally completed in August 2019. Strategy 2030 approved in 2008 outlined an investment plan to expand and modernize the entire network. By 2020, plans included high-speed rail sections linking Moscow to Kazan for 1.2 trillion rubles. Additional projects covered routes from Tula to Belgorod and Yekaterinburg to Nizhny Tagil. Between 2021 and 2025, construction targeted lines connecting Rostov to Krasnodar and extending Kazan-Yelabuga. The third phase scheduled for 2026-2030 will build the Moscow-Saint Petersburg high-speed section. Vladimir Yakunin presented the Trans-Eurasian Belt Development concept in March 2015 at a meeting of the Russian Academy of Science. This ambitious route aimed to link Asia with Europe through Russia and potentially reach Alaska via the Bering Strait. Limited railway capacity remains the main bottleneck for coal exports to Asia. As of January 2026, debt has soared to about $45 billion due to declining freight traffic.
On the 11th of April 2022, Reuters reported that the International Swaps and Derivatives Association determined a failure to pay credit event occurred on Swiss franc loan notes linked to RZD Capital. This marked the first step toward triggering a credit default swap. In December 2023, the joint venture with Finnish Railways ceased operations after trains stopped running in March 2022 following the invasion of Ukraine. VR Group assumed all financial obligations and took over rolling stock. US President Joe Biden announced economic sanctions against several Russian companies including Russian Railways on the 24th of February 2022. By November 2025, reports indicated the company held 4 trillion rubles or approximately $50.8 billion in debt. The downturn in industrial output combined with sanctions squeezed revenues significantly. Falling demand forced cuts to investment programs and cost-saving measures. These factors threatened long-term financial stability while deepening the crisis. The average salary on the network reached 31 thousand rubles per month as of October 2011. Loading volume for 2012 amounted to 1 billion 274.7 million tons representing a 2.7% increase from the previous year.
In 2013 railways carried nearly 90% of Russia's total freight excluding pipelines. Infrastructure and locomotive services accounted for 74% of the company's revenue in 2014. Freight traffic totaled about 1.4 billion tons in 2011. In 2012, the network carried 1 billion 56.7 million passengers. As of January 2026, the company faces a deep financial crisis due to sharp declines in freight traffic. Limited railway capacity restricts coal exports to Asia despite growing Asian demand. Various Russian actors have proposed rapid expansion of eastward rail capacity to compensate for declining European markets. RZD owns 252,900 freight cars including those held directly by subsidiaries like Federal Freight and TransContainer. The main producer of passenger cars accounts for 95% of output at Tver Carriage Works. At the end of 2012, inventory included over 20,000 locomotives split between electric and diesel types. Shunting operations utilized thousands of specialized units alongside standard freight equipment.
Russian Railways maintains a near-monopoly on long-distance train travel with its subsidiary Federal Passenger Company accounting for 90% of total passenger turnover in 2017. Passenger transportation represented 10.6% of revenue that same year. The fleet included 19,386 rail cars as of 2017 averaging 19.1 years old. Over 60% of long-distance passengers traveled in third-class sleeping carriages. International rail passenger traffic dropped from 19.4 million in 2013 to just 6.8 million by 2017. The first high-speed Sapsan train commenced service in December 2009 connecting Saint Petersburg Moscow and Nizhny Novgorod. Siemens manufactured these trains which achieved an occupancy rate of 84.5% according to RZD data from 2010. Profitability reached 30% though capital costs were excluded from calculations. The Allegro train began running from Saint Petersburg to Helsinki via Vyborg in December 2010. It operates jointly with Finnish VR Group using shared rolling stock. Suburban transport now runs through companies founded by executive agencies rather than directly by Russian Railways.
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Common questions
When was Russian Railways officially established?
Russian Railways was officially established in October 2003 when the state program for railway sector reform began. A decree passed on the 18th of September 2003 separated infrastructure upkeep from train operations to create this new company.
Who is the current president of Russian Railways and when did they take office?
Oleg Belozyorov took over the presidency of Russian Railways in August 2015 and continues to lead the organization today. He succeeded Vladimir Yakunin who served until the 20th of August 2015 after leading the company since the 23rd of September 2003.
How many employees does Russian Railways have compared to the 1990s workforce size?
The company underwent massive workforce reductions shrinking from 2.2 million employees in the 1990s to just 934,000 people by 2012. This significant decrease reflects the restructuring efforts implemented during the early years of the joint-stock company.
What major financial crisis did Russian Railways face as of January 2026?
As of January 2026 the company faces a deep financial crisis due to sharp declines in freight traffic with debt soaring to about $45 billion. Reports indicated the company held 4 trillion rubles or approximately $50.8 billion in debt by November 2025 following economic sanctions and falling demand.
When was the Sakhalin Railway gauge conversion project completed?
Russian Railways launched a project to replace narrow gauge tracks on Sakhalin Railway with broad gauge used elsewhere in Russia in 2003. This conversion was formally completed in August 2019 after more than fifteen years of work.