Russia’s economy continues to collapse as Russian railways is forced to cut investment by -40% due to debt service payments

Russia’s global military adventures continue to punish the economy back home to the brink, as Russian Railways, one of the largest employers in the country (685,000 employees) is set to reduce its 2025 investment program by approximately 40% compared to the current year, due to unservicable debt load, according to Tatyana Orlova, head of the company’s corporate finance department. 

Speaking at the “Russia Calling!” forum, Orlova highlighted the significant impact this reduction will have on the company and its extensive network of partners, including those involved in construction, procurement of traction rolling stock, and rail production.

Orlova emphasized that this decision aligns with a new strategic approach aimed at limiting the company’s demand for additional funds within the economy. She assured that all initiatives related to the reliability and safety of transportation will be fully implemented despite the budget cuts.

In November, Kommersant reported that the company’s investment program for 2025 will decrease by at least 36.7% from 2024 levels, amounting to around 834 billion rubles. The company’s substantial debt portfolio poses challenges, with interest payments having tripled in one year’s time due to higher rates.

This significant reduction in investment is expected to affect various sectors of the economy associated the company, potentially leading to delays or cancellations of planned projects and procurement contracts. The move reflects a broader trend of financial prudence within major Russian corporations in response to prevailing economic conditions.

Industry analysts suggest the cutbacks could hinder the company’s long-term development and modernization efforts. Stakeholders are closely monitoring the situation to assess the broader implications for the transportation sector and related industries.