RZD needs 10% tariff indexation, gov't support of 45 bln rubles in 2015 - Yakunin
MOSCOW. Sept 16 (Interfax) - Russian Railways (RZD) needs tariffs indexed 10% in 2015 as well as state support of 45 billion rubles in order to maintain financial stability and security.
This information was included in a September 12 letter from RZD President Vladimir Yakunin to Russian Prime Minister Dmitry Medvedev, according to an Interfax source familiar with the text.
Under such conditions, the company is forecasting profit of 200 million rubles in 2015 and will finance its investment program of 391.6 billion rubles. The debt burden will reach 780 billion rubles, while the debt/EBITDA ratio will be 2.7.
If the decision is made to index at the level of the actual 2015 inflation forecast, 7.2%, and if the company receives no state support, RZD will have losses of 60 billion rubles, Yakunin said, adding that this would bring about large cuts in personnel and a loss of financial stability.
In order to avoid this, Yakunin is asking for 10% indexation of freight tariffs in 2015 as well as government support of 45 billion rubles.
The source told Interfax that Medvedev had sent Yakunin's letter to Deputy Prime Minister Arkady Dvorkovich and Finance Minister Anton Siluanov "to prepare final proposals as part of the budgetary process."
