Increased Competition And Consolidation Predicted, As UCL Crowned Rail Freight Market Leader

CFW expects increased competition in Russia's rail freight market, with fleet expansions via rail car purchases and consolidation likely, following Russia's Universal Cargo Logistics Holding (UCL), owned by Russia's richest man Vladimir Lisin, winning the majority stake of Freight One (PGK) with a bid of RUB125.5bn (US$4.2bn.) The auction marks the crowning of a new market leader in Russia's rail fright sector and with increased competition in this sector expected BMI highlights upside risk to BMI's rail freight forecasts. While the successful sale of PGK is good news for Russia's privatisation drive we highlight that the auction might be on for the last for a while, with global financial headwinds damaging investor confidence leading the Russian government to postpone some planned asset auctions.

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