Text 5. Railway Systems in Market Economy

Nowadays railway systems play an important transport role. To do so they must be punctual, provide high-density services, and be in harmony with the environment. In order to cope with the requirements of the market economy railways introduce new methods of management, commercial activities and tariff policy. Simultaneously, they build new high speed tracks and reconstruct the old ones. Railways renovate their fleet and put it into operation. Rail managers develop logistic chains and new types of combined transport.

Awareness of environmental issues, daily highway and airport congestion suggest railways a new role within transportation systems.

In the competitive transport market, railways should use their advantages. They include high speeds, urban rail services, combined transport, and container transportation.

The share of railways in the national transport sector depends mainly on realisation of the market requirements. It can also be affected by the degree of state intervention, tariffs and subsidies.

In the past Russian railways were highly centralised and were the part of the planned economic system. As the market economy with free markets and free price system had replaced the planned one, the old practice became invalid. Taking much of the previous experience, the Ministry of Railway Transport launched a skilled gradual programme of adaptation to the market economy.

In the light of today’s market Russian railways satisfy demand for transportation and enhance efficiency and quality of their services. They also integrate into the Eurasian transport infrastructure.

In order to meet the requirements of the market environment railways must show more efficiency and flexibility of their services. They are to cut costs, introduce new technologies, and modernise rolling stock.

Answer the questions:

1. What do railways introduce to meet the requirements of the market economy?

2. What is the function of rail managers?

3. Why is a railway network a competitive means of communication?

4. What factors suggest railways a new role within transportation systems?

5. What are the main advantages of the railways today?

6. What does the share of the railways in the national transport sector depend on?

7. How were Russian railways organised in the frame of the planned economy?

8. How is the market economy guided?

9. Who is responsible for adjustment of Russian railway network to the market environment?

10. What steps must be taken for the adaptation of Russian railways to the market conditions?

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