Severstaltrans

completed

Severstaltrans Group, one of the largest private transportation groups in Russia, plans to expand their fleet of tank cars and acquire new locomotives as part of its capital expenditure program. IFC is proposing to help finance the expansion. In the Russian railway industry structure, Severstaltrans transportation companies are freight operators – they own and lease railway rolling stock and provide that rolling stock to customers, or shippers (e.g., oil companies). Railway infrastructure is provided by the government. The government also currently owns and controls large fleets of rolling stock. Operators currently don’t have responsibility for any losses and liabilities associated with freight shipments – these are borne by the shipper and the government railway infrastructure entities. Through a new law that came into force in May 2003, the Russian railway sector is entering a period of reorganization and reform. Consequently, the relationships and legal obligations of operators, both private and public, as well as customers/shippers and the government entities providing the railway infrastructure are expected to change and evolve in the coming years.