Russian Railways Faces Mounting Debt Crisis in Early 2026

2026-02-19 global

Moscow, Thursday, 19 February 2026.
Russian Railways faces a severe financial crisis with $51 billion in debt, prompting government intervention including tariff hikes starting March 1, 2026, and asset sales.

Mounting Debt and Declining Cargo Volumes

Russian Railways (RZhD) is grappling with a significant financial crisis in early 2026, burdened by approximately 4 trillion rubles (about $51 billion) in debt [1]. This has been compounded by a 14% decline in freight shipments since 2022, exacerbating the company’s financial woes [1][3]. The decrease in cargo volumes is attributed to reduced shipments of key commodities such as oil, construction materials, metals, and coal [2]. These reductions reflect both the demands of Russia’s war economy and increasingly challenging global markets [2].

Government Intervention and Support Measures

In response to RZhD’s escalating financial difficulties, the Russian government is implementing several support measures. On February 17, 2026, Prime Minister Mikhail Mishustin announced a ‘raising coefficient’ for all shippers [1][3]. Effective March 1, 2026, freight tariffs will increase by 1%, a move projected to generate an additional 22.3 billion rubles (approximately $290 million) in revenue [1][4]. Furthermore, the government is preparing a support package of 1.3 trillion rubles ($13.9 billion) that includes debt restructuring [1][3]. As of February 16, 2026, the government is also considering using funds from the National Welfare Fund (FNB) to further support RZhD [2].

Cost-Cutting Measures and Asset Sales

In addition to government support, RZhD is undertaking its own measures to mitigate the financial crisis. The company intends to slash its investment program by 25% in 2026, reducing expenditure to 713.6 billion rubles (approximately $7.8 billion) [1]. This includes a reduction in spending on construction and the acquisition of wagons and locomotives [1][3]. RZhD has also been ordered to sell assets, including a skyscraper in Moscow City acquired in 2024 for 193.1 billion rubles, and the Rizhsky Railway Station building in Moscow [4][6].

Expert Analysis and Long-Term Concerns

Financial experts have expressed concerns about RZhD’s long-term viability. Kyrylo Shevchenko, a financial expert and former head of the National Bank of Ukraine, noted that Western sanctions have significantly impacted RZhD’s revenue due to crushed export freight, while inflation and ruble fluctuations have inflated expenses [1][3]. Sergey Aleksashenko, a senior fellow at the NEST Center in London, described Russian Railways as ‘effectively bankrupt’ and doubts its ability to recover without external aid [4][6]. Analysts predict a further 20–30% decline in freight in 2026 if sanctions persist, potentially leading to more asset sales and state bailouts [3].

Sources

russian economy railways debt