RAILWAY REFORM CONCEPT TO BE ADJUSTED

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MOSCOW, October 27. (RIA Novosti) - In the near future the Russian government will issue a decree on amendments to the concept of the railway reform, said president of the Russian Railways Gennady Fadeyev at the company's board meeting on Wednesday.

"The amendments have been endorsed by all ministries and agencies," he said. The company has problems with rolling stock capacity and lack of subsidiaries, he pointed out.

"We have only half of the necessary rolling stock. By 2010 we need to increase it. Today private capital stands at our door, but we cannot receive it legally. So we need to speed up the reform and create subsidiaries," Fadeyev said.

The meeting considered the concept of creating subsidiaries in such spheres as capital repairs of passenger carriages and electric railing stock and components production.

According to the company's vice president Sergei Kozyrev, different variants that envisage different balance between plants' independence and integration of production capacities were considered. The board selected two variants that are most relevant to the goal of the structural reform.

The first scenario proposes creation of one subsidiary, Vagonremmash, which will be an open joint-stock company based on property of 11 plants with Russian Railway's participation of 100% minus one share. Then the design and engineering bureau developing and implementing new technologies will remain the company's subsidiary, Kozyrev said.

As to the other scenario, it envisages creation of 11 subsidiaries based on 11 plants, whose shares will be distributed as follows: the Russian Railways will own 100% minus one share, which will belong to the other co-founder. The bureau will remain the company's subsidiary, while directorate of Vagonremmash will be the company's structural division with controlling functions. Representatives of the directorate will receive seats on boards of subsidiaries and will participate in their work, he explained.

Most of board members, including directors of large carriage-repairing plants, supported the second variant of the concept.

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