Rail Garant publications

The Private Group of Companies Rail Garant comprising a number of railway operators, plans to increase the operating fleet to 25 thousand cars up to 2013. The plan includes, inter alia, the program for the development of rolling stock fleet which envisages near two-fold increase in the number of oil and gasoline tanks and tank containers – up to 4.5 and 3.5 thousand units, respectively. General director of Rail Garant, Roman Kotenko, told the Argus about these and other goals to be achieved at his new position.

– What are the goals the shareholders have set for you having invited you to lead Rail Garant?

– The Group is developing intensively. The fleet increases, the new areas of transportation develop, new organizational problems appear, the solution of which will somehow affect the operation and effectiveness of the group as a whole. The main challenges facing me are consolidation of the assets of the holding, the optimization of existing business processes, current operational and organizational costs. In particular, the management company Rail Garant Finance was created, an entity to which the group’s companies will assign to outsource a number of functions: financial, accounting, personnel, and leave for themselves only productive functions.

SIBUR has become a school for me as regards to building a system of business and I am sure this experience will help me in achieving the goals of Rail Garant.

Another challenge is to prepare the company for initial public offering (IPO). We see good examples of the railway market and are also aimed at achieving a positive outcome.

– And if we talk about specific figures, which are expected to achieve?

– The holding company is faced by a quite ambitious challenge: to become in the next three years one of the leading Russian operators in terms of traffic volumes and the size of the rolling stock operated.
Certainly, Rail Garant is even now a significant player in the rail market. Consolidated fleet group consists of 20 thousand units. Last year traffic volume has exceeded 20 million tons. It is a good indicator.

– How would you describe the current situation in the Russian market of tanks and open wagons?

– In our view, today tanks and open wagons are one of the most demanded types of rolling stock. The market of tanks is being disposed of the former inventory fleet, so operators are trying to buy new cars. But, unlike the open wagons market, the balance of supply and demand of oil and gasoline tanks had already been attained.

On the contrary, there is an acute shortage in the open wagons market. As a result, the cost of new cars and rents of operators increase. According to our predictions, this trend will not last more than three years. Then the situation should stabilize, which in turn it will reduce the cost of cars and rental rates.

– At the moment, your company looks as a versatile carrier (see reference). Will you keep this policy?

– Today, more than half fleet of Rail Garant accounts for general-purpose cars. Definite predictions for the future are difficult to give. The market situation is constantly changing. The analysis and thorough study of the market will show what will happen tomorrow.

Until 2010, the group has actively been increasing its operating fleet. Now our priorities have shifted towards increasing the share of our own cars. Until the end of 2013, the consolidated fleet of Rail Garant will be not less than 25 thousand cars, while the share of our own fleet will increase to 60%. We are focused on long term and do not aim to obtain short-term earnings, so our priority is the acquisition of rolling stock in title.

– The market of tanks is highly competitive and formed. How do you assess it?

– It is not a secret that the market of oil and gasoline tanks is quite clearly structured. Today we have about 2.5 thousand units operated.

By the end of 2013, we plan to increase their number up to 4.5 thousand units. It is a sufficient number for us. We have standing customers and stable traffic volumes. Nevertheless, we try to find the ways to increase the performance of the group in the field of transportation of oil products. It is worth noticing that Rail Garant today is the largest owner of tank containers for transportation of liquefied hydrocarbon gases, chemical and oil products.

– What important events do you expect in the industry this year?

– We look forward to the competitive tender for the sale of the Freight One company (PGK – Pervaya gruzovaya kompaniya). Regardless of who will buy the company, it will shake up the market in terms of changing customer base, rates, and things like that.

The dynamics of the Freight Two company (VGK – Vtoraya gruzovaya kompaniya) development, which will also seriously affect the situation prevailing on the railway market, is interesting as well.

And of course, we are waiting for a more ordered system of traffic on the network of the Russian Railways, as we see that today the problem is the shortage of locomotives affecting the turnover of the car and, consequently, its profitability.

– Do you expect the solution of the problem of unproductive empty return?

– Build-up of the fleet throughout the Russian Railways network leads to the increase in the empty run, the network becomes clogged, locomotives starts lacking. But I think that the professionals at the head of the industry will make every effort to resolve this problem.