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May is the hottest season for dacha and summer cottage owners looking forward to planting potatoes and other vegetables, seedlings, flowers. The number of St. Petersburg dwellers taking suburban trains increases several times. But this year many of them were unpleasantly surprised by the North-West Suburban Passenger Company, which has revised suburban train fares from the beginning of 2011. City and region commuters getting to work by rail were the first to appreciate new rates. And now summer residents opening their new season also feel the effect of rising costs as fares have grown considerably (more than 1.5 times). A round-trip ticket to Luga is more than 600 roubles and about 500 roubles to Pupyshevo. If the dacha is more than 100 km from the city, a single visit to it will cost a 3 person family about 1.5 to 2 thousand roubles ($50–65).
The process of fare revision resembled an absurd theatre performance. If previously fare was increased for individual zones, now it includes a fixed rate for a certain number of kilometers and a rate for each next kilometer. St. Petersburg and the North-West Suburban Passenger Company reconciled new tariffs starting from January 1, 2011, while the Leningrad region failed to come to mutual agreement about new rates. As a result, prices for traveling to the city and back to the country were quite different. The situation was strange enough to attract the attention of North-West Transport Prosecutor's Office. After a while, the region and the company have finally come to an agreement and approved tariff application rules. Finally, the fare for travelling to and from the city was equal.
But still it was too high. Before that, suburban train fares for St. Petersburg and the region were revised two and a half years ago. And then only commuter tickets rose in price and the increase was substantial. Current events were initiated by restructuring of the OAO Russian Railways when suburban passenger services became independent regional companies. (More in our publications “Where does a commuter train arrive from St. Petersburg?”, “Will the economical crisis stop rail reforms or suburban trains?”, “The reform at a deadlock”). The Russian Railways tries to make passenger operations breakeven (before 2011, profits from freight transport compensated for losses from passenger services). To make this plan a reality, suburban businesses were assigned to the Russian Railways’ subsidiaries founded together with regions of the federation. According to the Russian Railways, new players are to order suburban passenger services compensating to the railway losses from unprofitable fares and reduced fare tickets.
Everything went not as well as it was planned. Many regions were unpleasantly surprised by the amount of compensations demanded by the railway. During previous years, the region suffered mainly from reduced intensity of suburban trains (certain routes were cancelled altogether). The Russian Railways is on its way to reducing the share of unprofitable services. Fare revision is meant to become another way out. For now, passengers of suburban trains in the Leningrad region pay tens of euro, which is nearly as much as in the same trains of the most developed European countries including Germany and France. But average income in Russia is several times less than in the above mentioned states.
Meanwhile, fares are growing nearly in all regions where suburban passenger companies appeared in 2011: at Kuzbass (for 30%), in Irkutsk, Novosibirsk, Kaliningrad, Samara, Sverdlovsk, Yaroslavl regions. Last year, suburban fares grew in Moscow and Moscow region, in Primorie.
The president of OAO Russian railways, the company’s management and heads of suburban companies are repeating their mantra of “self-repayment”.
Of course, this is a basic rule for any commercial structure but what about social responsibility of the Russian Railways as a state company? What will be a break-even point taking into account decreasing passenger flow?
To declare business activities unprofitable or profit-making, one should make this business, perform certain activities. Without passengers, there will be no business and no loss. The statistics of passenger operations in Russia suggests that local rail passenger services might soon be cancelled.
Chart 1 shows the Russian Railways’ passenger operations (regional and suburban with the current split of about 90% in favour of suburban services). We see clearly that in 2010, when other industries showed positive tendencies, the number of passengers of the Russian Railways continued to decline. During the first half of 2010, 451 million passengers chose its services, which is 20.3% less than in 2009, before the crisis. Compared with the first half of 2008, the number of passengers have dropped 23.6% (!). The situation with commuter rail business is even more oppressive. During the first half of 2010, the railway transported 21.6% less passengers than in 2009 and 24.3% less than in 2008. And what about the second half of 2010? Well, during the second half of 2010 the company chose not to report its passenger service numbers! Looking at 2010 results, we see only freight service and investment volumes. Its passenger services have simply vanished: no numbers, no problem, and nothing to discuss.
Chart 1

Chart 2 shows passenger activities of the Russian Railways expressed in terms of passenger turnover. Passenger turnover data is published by the Federal Service for State Statistics (FSSS). Business dynamics in 2010 is worse than the previous years, without signs of long-expected recovery. Passenger turnover of the Russian Railways declined 8.2% to 139,028 million pass.-km in 2010 compared with the year before. Suburban service turnover dropped 26.6% to 28,032 million pass.-km versus the previous year, says the report of the Russian Railways for the first quarter of 2011.
Now that the figures are rising (passenger turnover increased 2% in 4 months), the Russian Railways reports some of its passenger rail business statistics for 2011 (its passenger turnover). But these figures characterize mainly regional services, and not suburban rail, so real growth cannot be declared yet. Passenger railway landscape in the North-West region is worse than generally in Russia. According to Petrostat, in January–March 2011, 25.9 million passengers were transported by the Oktyabrsk railway, or 97.4% compared with the same period a year ago.
Chart 2

Even incomplete figures confirm that the crisis is not the only factor to blame for the drop in passenger rail services. Nor can we say that people were unable to choose commuter trains due to their financial troubles as Russian commercial aviation transported 56.9 million passengers in 2010, which is 26.2% more than in 2009, and its passenger turnover growth of 30.8% became a new record. It seems like the results are in direct correspondence with rail services restructuring at the Russian Railways.
Having transferred suburban passenger services to its subsidiaries, the Russian Railways takes its pleasure in multi-million investment projects incompatible with commuter trains. Not long ago, details of a new costly project by the Russian monopoly were announced. By 2018 FIFA World Cup, high speed railways worth 1 trillion roubles will join host cities to carry half a million fans. So, two million roubles are assigned per each fan for transportation. Of course, high-speed trains are not only for the World Cup fans but for Russian citizens as well. Obviously, high-speed railways must be developed. But is it right to develop them at the cost of other passenger services as it is done in Russia now?
Launch of Sapsans linking Moscow with St. Petersburg ended in mass cancellation of commuter trains at this route. Absence of suburban trains was so pressing that Dmitry Zelenin, Governor of Tver region, had to address Igor Litvin, Minister of Transport, to settle the problem. Now, the similar situation is at Moscow–Vladimir section, where suburban trains started to vanish in winter after a launch of the Sapsan to Nizhni Novgorod. Only a few electric expresses serve passengers here. Besides, high-speed trains would hardly be as popular at the suggested routes as at Moscow – St. Petersburg line section. The Russian Railways has its own methods for popularizing such trains, though. By canceling budget passenger services, for instance. Meanwhile, commuter services are a fraction of big project costs. The Russian Railways mentions annual suburban train compensation of 40 to 50 billion roubles from federal regions.
And finally, a couple of words about the position of Russian government, which was so interested in cargo services that gave railways complete control over suburban rail business. This year the situation has changed. The state decided to refund infrastructure costs aimed at breaking even suburban rail services. During 2011 and 2012, the Russian Railways will get 25 billion roubles annually. State budget refund was approved for two years. During this time, the Russian Railways and regions of the federation are meant to complete restructuring of suburban rail services, to conform fares and compensations.
Without that suburban trains will become a high-end service for a limited number of people, while millions of Russian citizens will have to invent other means of conveyance. Unfortunately, at present there is no alternative to railway in certain regions of the country.

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