Railroad of Yakutia Develops
20.06.2008 (18:22)
On June, 10 new board of directors of Railroad of Yakutia OJSC was elected at the annual meeting. It changed due to transfer of 50% of the company’s shares to OAO RZD. Vasily Shimokhin, General Director of the company comments on situation in Railroad of Yakutia, which became OAO RZD’s affiliate.
– Mr. Shimokhin, transfer of 50% share holding of Railroad of Yakutia to state-owned OAO RZD was not a surprise for you; did your predecessor A.N Dudnikov suggest this idea?
– Really, we discussed this step. And the President issued Decree of the Russian Federation ¹ 178 “On Russian Railways OJSC” on February 15, 2007. According to it, stocks of some companies which are the federal property were transferred to OAO RZD. Besides our company, it concerned TransCreditBank, “Gudok” newspaper. In December, 2007, the Government allowed OAO RZD to carry out additional stock emission and the bargain was concluded. This measure was not a surprise for us. We prepared for it with OAO RZD.
– Will your company become OAO RZD’s branch or other subdivision including, for example, affiliation to Far Eastern Railway?
– As I know, these measures are not planned. Our railway is of low-density and if all of OAO RZD’s economic standards are applied, the enterprise will become unprofitable. The volume of cargoes transported by the railway (last year it was 2.2 million tons) according to the Tariff Regulation ¹ 10-01 will not pay back expenses. In my opinion, there is no point to affiliate Railroad of Yakutia to Far Eastern Railway because of economic factors. There is an opinion in OAO RZD that development of Railroad of Yakutia as joint-stock company is the most reasonable way to optimize costs and provide profitable operation with such volumes. The share of OAO RZD in our stock may increase or reduce, but we don’t expect purchase of all stock. I think that nobody needs it, structure reform is carried out, it means businesses’ split-off with optimization of costs and revenue.
– Do you think, your company’s joining the holding company may hamper managers to take independent decisions?
– No, it will not change their possibilities. There are Company rules, executive board: board of directors and the general director. The board of directors solves all strategic questions and sets base economic parameters aimed on profit. As to the technology of work, we cooperate with OAO RZD because we have one technological process of transportation. I think that we have a lot of possibilities to take independent decisions in the sphere of personnel and technological policy within the limits of joint-stock company. The regulations or other documents don’t limit any activity. As for innovations, two changes in the Regulations were made on the initiative of the new shareholder, but they are insignificant for the company’s independence.
– Your company became a part of OAO RZD. What are the advantages and shortcomings of this event?
The main shortcoming is increasing reports. OAO RZD includes many departments, and a lot of them demand information from us. It is a problem of all large holding companies. There are no other shortcomings in my opinion. There are more advantages including integration, understanding and economic benefits. OAO RZD used to provide services for us with 35% profitability, but now it amounts to 15%. It is very advantageous for us because we have 80 contracts with OAO RZD’s enterprises.
– What are changes in the board of directors of Railroad of Yakutia? Was new chairman elected?
– On June 10, annual meeting of shareholders was held, its participants took decision on new board of directors. Nowadays it includes six people from OAO RZD, they replaced representatives of the Russian Federation. S.M. Babaev, G. M. Fedulov , A.J. Mironov , V. I .Rebets, S.V.Rogovoy and Sidorov Ñ. became members of BOD. The government of Yakutia which owns 40% of shares of Railroad of Yakutia and OAO RZD will discuss the candidature of chairman. The former chairman of the board of directors, the Deputy Chairman of Yakutia Republic government Artur Alekseev is included in current BOD.
– It is known that Railroad of Yakutia has innovative spirit. Will it remain?
– I’m sure that it will be kept. Our largest shareholder guarantees it. Our enterprise should meet requirements when Yakutia Republic develops. The style of work and the policy of our president Vyacheslav Shtyrov are based on the idea that people can work successfully in northern regions. It concerns development of extractive and processing industry, new technologies and science. All equipment and technologies should meet northern regions conditions. And the President of Yakutia wants the Republic to be world polygon for new technologies test. It concerns transport branch and railway. It concerns applications of new materials and machines. Nowadays we cooperate with Siemens actively and propose them to give us their diesel locomotives for test. We have the same agreement with Kazakhstan where locomotive plant is built by General Electrics Company. Similar experience is accumulated actively in the mining industry of the Republic and other branches.The second important feature is the people’s positive mood. Our collective can’t work otherwise. We are ready to exploit large approaching way to Elga coal field. We propose our calculation to Mechel, we know how to exploit railway in the conditions of northern regions. Mechel is interested in this project and we carry on negotiations. Everybody knows about our cooperation with General Electric Company on modernization of main-line diesel locomotives and we also try to modernize rail tractors. Our staff wants to develop and find effective solutions. And I’m sure that the new General Director will not change this situation. I think that OAO RZD doesn’t want to hinder us.
– What is the volume of transportation planned for 2008?
– Our main index is the throughput. The planned transportation volume will be smaller than in 2007, because we transported additional 100 tons of pipes for ESPO. Nowadays we try to attract new cargoes, but the volume will reduce according to the plan. We reached agreement with TransContainer on new contracts and it means that we will increase volumes of transportation on Railroad of Yakutia.
Interviewed by Andrey Guryev
Print version
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