Russian Chamber of Commerce and Industry submitted amendments to the draft bill regulating the ship-or-pay principle.
The CCI proposes, among other measures, to introduce mutual responsibility of shippers and rail carriers when concluding ship-or-pay contracts. This initiative will be considered by the State Duma Committee on Transport and Transport Infrastructure Development.
CCI emphasizes that the provisions of the current bill put the natural railway monopoly in obviously privileged conditions, as it establishes the obligation of the shipper to pay and does not envisage equality of the parties.
Thus, the transportation company will be able to receive a guaranteed payment from a shipper even for unprovided services, while a shipper will only have the right to collect a fine and will have to prove the legitimacy of its claims. In addition, the fee received by the transportation company will be fixed, while the amount of penalty that the shipper can collect, on the contrary, can be reduced.
Russian Railways (RZD) has long sought the possibility of concluding ship-or-pay contracts. However, market participants strongly oppose this, as the new law will give RZD the right to force out infrastructure users who fail to sign ship-or-pay contracts, which contradicts the principle of equal accessibility of infrastructure stipulated in the legislation.
Coal producers also point out that the rate of inflation adjustment of freight transportation tariffs, as well as the planned increase in fees for railcars staying on public lines will only lead to higher transportation costs and heavier burden on shippers accompanied by a drop in volumes, which have already significantly decreased since the beginning of the year amid depressed international prices, sanctions and infrastructure constraints.
In January-August 2024, rail transportation of coal for export plunged by 13 mio t to 126.3 mio t (-9.4% y-o-y).
Source: CCA Analytics
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