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New trains for private Russian rail company
EBRD lends $40 million to Russia’s BaltTransServis oil-freight operator
The European Bank for Reconstruction and Development is lending $40 million to
the Russian railway operator OOO BaltTransServis (BTS), demonstrating its
conviction that helping the country’s transport operations is crucial both in
the creation of a single economic space within the country and for its
integration into the world economy.
BTS, part of the SeverstalTrans Group, is the largest private operator in
Russia specialising in oil transport and not related to an oil producer. The
company will use the six-year credit from the Bank to buy tank wagons and
freight locomotives. It now holds a railway carrier licence and plans to start
its own rail operations as one of the country’s first private rail companies.
The BTS expansion takes advantage of new business opportunities created by the
Russian government’s current reform of the railway sector reform and the
booming oil market.
Russia’s railway sector covers 8 time zones, stretches across 86,700 route
kilometres and includes more than 127,000 kilometres of railway lines – making
it one of the biggest systems in the world. The reforms being enacted by the
Russian government include specific measures for increasing the participation
of the private sector.
By supporting the expansion of BTS, the Bank is thus also helping to realise
this broader objective. The deal strengthens competition within the sector,
since BTS will be well placed to enhance competition both with state-owned
regional carrier and other private-sector railway operators. BTS’s expanded
and more efficient activities will offer attractive outsourcing opportunities
to oil companies which run in-house transport subsidiaries, and encourage them
to switch to independent operators.
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