8 Feb 2023 10:32

Russian Energy Ministry backs Kuzbass proposal for freeze on rail rate hikes

KEMEROVO. Feb 8 (Interfax) - Russia's Energy Ministry supports a proposal from the authorities of Kemerovo Region, home to the Kuznetsk coal basin, to impose a moratorium on railway freight rate increases for coal, Deputy Minister Sergei Mochalnikov said.

"We support the initiative to impose a moratorium for 2023-2024 on changes in transport rates and tax legislation in the sector," Mochalnikov said in a statement on the ministry's website.

The Kemerovo Region authorities proposed at a meeting of the Russian State Council's energy and transport commission on Tuesday to impose such a moratorium on rate hikes, as well as a moratorium on the passage of new laws and changes to regulations "that will lead to an increase in the financial and administrative burden on Russian freight shippers, ports, operators and other freight transport participants."

Mochalnikov said that coal companies "above all" must be able to forecast shipments to enter into and fulfill long-term contracts.

He also said that coal companies are increasing shipments to ports in Russia's Northwest due to limited capacity on Russian Railways' (RZD) eastern railways and approaches to the Azov-Black Sea basin. He said it is necessary to expand the throughput capacity of eastern railways "within the timeframes stipulated in documents approved by the government."

"It is necessary for all transported goods travelling along eastern railways to be used in the formation of indicatives, not only coal products. This will ensure transparency and predictability for both freight shippers and for government authorities when forming the revenue portion of regional budgets," Mochalnikov said.

The Kemerovo authorities also proposed to reinstate decreasing coefficients "when determining payment for export shipments of hard coal depending on the shipping distance." They also proposed granting discounts for coal shipments to ports in the Northwest in 2023-2024 to attract additional freight and decongest eastern railways.

Kemerovo is also pushing for comprehensive monitoring of construction on eastern railways, specifically monthly inspections of the 83 approved priority projects on these railways with the participation of representatives of the State Council's energy and transport commission, as well as the Consumer Council on the Activities of RZD.