RUSSIAN Railways (RZD) is to delay development of its Eastern Polygon project due to a shortage of funds. According to Andrey Makarov, RZD deputy CEO, the railway will spend only Roubles 110bn ($US 1.4 bn) on the project in 2025, significantly lower than the Roubles 400bn invested last year.

Development of the Eastern Polygon is aimed at facilitating the movement of freight from European Russia to Siberia, and the Far East, and includes the modernisation of the Trans-Siberian Railway, Baikal - Amur main line, and the Krasnoyarsk Railway.

Makarov recently disclosed that this year's budget for the work on the Krasnoyarsk Railway has already been exhausted, while work on the Baikal - Amur main line could come to a halt this autumn.

RZD has temporarily opened the main section of the Eastern Polygon to traffic, but as the project is far from completion, it is unclear how long it will remain in use. Makarov suggests that work on the project as a whole could be pushed back by two years, noting that the number of staff at work on the project dropped from a record of 36,000 in 2024 to only 10,000 in 2025.

Budget cuts

The Eastern Polygon is not the only project affected by budget cuts. In 2025, RZD downsized its investment programme nearly twofold to Roubles 880bn. Investment in new construction slumped most noticeably. In 2025, RZD plans to spend only Roubles 300bn on new infrastructure, one of the lowest levels in the current decade, and a far cry from the Roubles 730bn spent in 2024.

RZD is reportedly also scaling back its plans to purchase new rolling stock, as a result of falling freight traffic and a rising debt burden. During the first four months of 2025, RZD saw a 7% decline in freight traffic on its network. As the Russian Central Bank's key interest rate is set at 20%, close to the all-time high of 21% maintained for the previous six months, servicing existing debt obligations this year will require Roubles 688bn, equal to almost 25% of RZD net revenue.

In 2024, RZD received Roubles 162bn under various state aid programmes, a figure observers believe will most likely be cut this year, as the Russian federal budget experiences a growing deficit.