Russian Railways, or RZD, said Wednesday that it had approved the creation of a new subsidiary that would handle long-distance trips.
Russian Railways will own a stake of 100 percent minus 1 share in Federal Passenger Company, and will capitalize it to the tune of 136.8 billion rubles ($4.59 billion).
Federal Passenger Company will receive 24,690 train wagons that are currently owned by RZD and will take all long-distance trips from RZD starting from April 1, 2010.
“The goal for creating this company is the organization of an effective business in transporting passengers long distances on the basis of cooperation between the company and the authorities,” RZD vice president Mikhail Akulov said.
The company aims for revenues of 165 billion rubles a year from 2010, and will get its financing from bank loans — with help from state guarantees.
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