Russian coal exports could face higher costs and weaker investment incentives as proposed rail contract changes shift risk onto shippers.
Proposed amendments to Russia’s railway transport charter that would enshrine a ship-or-pay principle could hit coal exports and slow investment in mining, industry participants say.
Critics argue that Russian Railways (RZD) is effectively boosting profitability under the banner of tighter planning discipline, shifting market and operational risks onto shippers without taking comparable liability itself.
RZD says the contracts would be voluntary, would not add charges on top of regulated tariffs and would provide predictability for long-term planning.
Opponents say the economic effect would amount to a hidden surcharge. If shippers must pay close to the full freight charge even when shipments do not take place, demand, price and disruption risks in practice move from the carrier to the customer. For low-margin coal, they say, that is critical: experts estimate the mechanism could add about 5–10% to the effective transport cost, narrowing the volume of coal that remains profitable to export and ultimately eroding RZD’s own freight base.
A second concern is investment. With mandatory payments rising in a weak market, companies have an incentive to cut capital spending. If transport becomes a penalty-like cost item, new mining cycles and capacity expansion are more likely to be postponed, with the impact showing up later in lower loadings.
A third criticism is the lack of mirror liability. International take-or-pay arrangements include penalties for both sides: the customer pays for unused capacity, while the carrier pays if it fails to provide it. Under the model being discussed, liability would sit with shippers, while claims against RZD for non-performance are difficult to substantiate, including due to access to primary operational data.
Finally, on congested routes the market fears the mechanism could create a de facto priority for those who pay, effectively legitimizing paid access to scarce infrastructure. This would allow RZD to lift profits at the expense of the coal sector while avoiding equal responsibility for delivery guarantees.
Source: CCA Analysis
