Russian Railways Faces Budget Cuts Amid Economic Strains

The board of state-owned Russian Railways approved a reduced budget of 713.6 billion roubles for 2026, down from 890.9 billion roubles in 2023. With a debt of 4 trillion roubles, the company faces financial challenges amid Russia's slow economy, emphasizing infrastructure maintenance and railcar purchases.

The board of state-owned Russian Railways has approved a budget of 713.6 billion roubles for 2026, marking a reduction from 890.9 billion roubles this year, the company announced on Monday. The Russian government is exploring strategies to support the nation's largest commercial employer amidst a sluggish economy attributed to wartime pressures.

Of this approved budget, 531.4 billion roubles will be allocated towards infrastructure maintenance and safety improvements. An additional 161.7 billion roubles is designated for the acquisition of railcars, and 120 billion roubles is earmarked for constructing a high-speed rail link between Moscow and St. Petersburg, stated Russian Railways. Andrei Kostin, CEO of Russian Railways' primary creditor VTB, highlighted maintaining a robust investment level as a key concern in debt restructuring talks.

Despite the reduced budget, Russian Railways' spending for 2025 is significantly lower than the record levels of the previous year, when it peaked at 1.5 trillion roubles. As the company navigates economic challenges, maintaining investments at a high level is considered vital by stakeholders.

(With inputs from agencies.)