From 2025 Russian Railways will start working under "carry and pay" contracts

From 2025, Russian Railways will start working under "carry and pay" agreements. A responsibility.

Until 2025, only coal miners will be allowed to work on this principle. Then all shippers will be able to switch to such contracts. These principles are enshrined in the new version of the amendments to the Charter of railway transport and the federal law.

The idea of ​​using the “take and pay” gas supply contract principle for rail transportation appeared back in 2016, but some shippers were against it. At the beginning of 2021, Andrey Belousov, First Deputy Prime Minister and Chairman of the Board of Directors of Russian Railways, instructed to start concluding such agreements by the end of the year.

The essence of the "carry and pay" agreements is to establish the responsibility of the consignor for failure to provide the volume of cargo agreed with the carrier for transportation, which the latter undertook to accept. A similar "take and pay" principle has shown its effectiveness in gas supplies.

The task is to deliver coal to the markets of the Asia-Pacific region through the ports of the Far East. There, demand and high prices for coal remain, in contrast to the European direction. Vladimir Putin in March 2021 announced the need to increase coal supplies by 30% compared to 2020. However, there is a problem with the capacity of the BAM and Transsib.

The new scheme of the "take and pay" agreement, according to Belousov, can resolve these difficulties. It will also make it possible to take into account the interests of other shippers and ensure non-discriminatory access to the railway infrastructure.

Initially, it was assumed that coal suppliers would have priority under the "carry and pay" system. However, the draft law on introducing such amendments to the Charter of the railway transport was criticized, in particular, it was opposed by the FAS and the Supreme Court. According to the experts, the selection criteria for the conclusion of "take and pay" contracts were not formulated clearly enough, the responsibility was provided only for carriers.

At a recent meeting at the Ministry of Transport, held on September 27, the legislative framework was once again under discussion. The bill has been significantly revised. The clause on the priority of shippers working under "carry and pay" contracts has been excluded from the document. The distribution of cargo volumes will be carried out by the Ministry of Transport according to separately approved rules. From 2022 to 2025, "carry and pay" contracts will be concluded only with coal miners, then other shippers will be able to switch to them.

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