Support The Moscow Times!

Railways and Government Differ on Valuation

Russian Railways and the Finance Ministry dispute the companies valuation as the government proceeds with their efforts to privatize 25% of the company's stock.

The 25 percent stake in the country’s rail monopoly that the government wants to privatize by 2013 is worth about 260 billion rubles ($7.83 billion), Russian Railways’ managers said.

The estimate is considerably lower than the government’s own figures, however. A Finance Ministry official put a 25 percent share in the company at 700 billion rubles, Vedomosti reported.

That would make the entire company, which employs almost a million people and operates the second-longest stretches of track in the world, worth about 2.8 trillion rubles ($85 billion), compared with the company’s 1.04 trillion-ruble valuation of its worth.

The sale of a 25 percent minus one share stake in Russian Railways by 2013 is one of several sales of state assets included in a privatization plan confirmed by Prime Minister Dmitry Medvedev and the Cabinet last month and updated in a decree published Friday.

Russian Railways president Vladimir Yakunin, who has repeatedly expressed skepticism about the wisdom of privatizing national rail services, has called the deadline “unrealistic.”

“Honestly speaking, I don’t yet understand this opportunity to directly privatize shares of Russian Railways,” he told Interfax over the weekend.

Russian Railways’ estimate values the company lower than similar firms, experts say. Union Pacific in the United States is valued at $54.14 billion.

… we have a small favor to ask.

As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just 2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.


Read more