Prices held, demand lost
28.06.2009 (14:03)
We have asked Valery Shpakov, General Director of OAO "New Transportation Company" (part of Globaltrans Group), which has more than 6 thousand tank wagons in its park, to comment on the most important questions concerning the tank wagon repair service market.
- Valery Vasilievich, what is your opinion regarding the current situation in the sphere of tank wagon major repairs and depot repairs?
- Today capacity in repair shops (which belong both to The Freight Wagon Repair Central Management - FWRCM and to commercial enterprises) exceeds demand.
Generally, one notices that the rolling stock repair service market is growing. New private companies are appearing. They provide services using both the newly built wagon-repair shops and those 15 depots, which, as you know, OAO RZD sold in 2008.
- Are there enough wagon-repair enterprises in the operational range of your company’s tank wagons?
- The tank wagon transport routes which we use today allow us to choose the most favourable enterprises: we can repair wagons either on Gorki Railway or use the tank wagon repair facilities of Oktyabrskaya and Moscow mainlines.
- What can you say about the dynamics of repair service prices? Have they changed in comparison with last year? If the answer is yes, then in what direction, and were the changes at private wagon-repair enterprises or at those which belong to the state monopoly?
- As is known, since March 16th, 2009, in order to meet the anti-recessionary program, FWRCM reduced its depot wagon repair rates by 2% to 8 %. Thus, undoubtedly, Central Management made an adequate response in the dynamically changing cargo transport market and in the conditions of economic challenge. This decrease was meant to support the economic activities of the rolling stock proprietors, which is the basis for effective cooperation with business in future. Such measures have allowed market competition to rise in wagon repair servicing and thus to keep repair rates at last May’s level.
I shall add that New Transportation Company keeps working with private wagon-repair depots in order to reduce repair prices, so, generally today, commercial enterprises’ service prices are not higher than the prices offered by FWRCM.
Simultaneously it is necessary to note that FWRCM’s prices for units and spare parts are not the same as average market prices, they are 10% - 15 % higher even after depreciation. This factor is limiting opportunities to purchase the necessary spare parts directly from the places where the repairs are taking place.
- And how do you estimate the quality of works?
- It remains at a reasonable level. OAO New Transportation Company deals with complaints in cases where the depot repair work has not been done qualitatively. It is necessary to mention that recently the idle time of tank wagons awaiting repair by New Transportation Company has decreased.
However, I would also like to mention the fact that one of the main phases of rolling stock repair is its preparation for further operation in washing-steaming stations. The renting of the majority of them to First Cargo Company does not allow us to predict the situation for the preparation of tank wagons by such stations. Also the position of First Cargo Company as the seller of this service to other rolling stock proprietors is still not clear.
Interviewed by Viktoria Merkusheva
Print version
Private rolling stock owners complain of increase of price for rolling stock repair. They wait for changes in wagon repair sector which can hardly take place until the legislative base is improved. Alexey Sannikov, Director on transport logistics of “Mineral Group” considers that there are some problems despite of some positive tendencies in joint work of private companies and OAO RZD. These problems should be solved.
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