World Bank has called on Belarus to reform and restructure railway sector. The changes are expected to boost competitiveness, passenger experience and the local economy.
by Winnie Wang, World Bank Senior Transport Specialist
Today, the Belarusian Railway network extends for some 5,500 kilometers. Employing about 85,000 staff, it is one of the largest employers in Belarus and is a major source of tax revenue.
Nearly 75% of rail container traffic between China and Europe flows across the Belarusian Railways.
Despite its geographic advantage, however, Belarusian Railways’ share of transit traffic has seriously declined. This is partly because of the region’s changing political geography and the growth of Russian ports in the Gulf of Finland.
The railway also finds itself competing increasingly with road transport for both passenger and freight business. While international passenger tariffs have increased, regional and local passenger service tariffs have declined considerably.
The prices for passenger transport by rail are so low that a 30km rail journey costs less than a metro ride in Minsk.
The Railway and Logistics Sector Study highlighted that the railway sector’s share of transit traffic in Belarus has dropped from 35% to 29% in the last decade.
The decline was attributed to the railway sector’s organisational structure and tariff policies, as well as increased competition from road transport.
The share of transit traffic in Belarus has dropped from 35% to 29% in the last decade
Besides, railways’ structure which is a public association that supervises 29 state-owned legal entities with own management is also a problem of its kind.
Also, in Belarus, most rail prices are regulated by the state. How does this affect railways’ income? While international passenger tariffs have increased, regional and local passenger service tariffs have declined.
What’s the way forward?
Railway and Logistics Sector Study for Belarus advocates organisational restructuring, tariff reforms and strategic use of digital technologies.
World Bank country manager for Belarus Alex Kremer said: “Consolidating all these entities (of Belarusian Railways) into a single state-owned enterprise would help improve the sector’s overall management and competitiveness.”
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The study recommends developing a new railway strategy. It should include assets evaluation, changes to accounting practices and devising business plans for freight and passenger rail.
The study also calls for the strategic use of digital technologies to improve customer service, increase operational efficiency, and support infrastructure management.