JPRS ID: 9272 USSR REPORT CONSUMER GOODS AND DOMESTIC TRADE

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: JR~RS L/9561
- 20 February 1981 .
Translation
RAILWAY TRANSPORT ECONOMICS AND PLANNING
- Part I
a Railway T`ransport Ecor~omics
Ed. by
I.~l. Belnv and M.~. Trikhunkov
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JPRS L/9561
- 20 February 1981
RAILWAY TRANSPORT ECONOMICS AND PLANNING -
. PART I
RAILWAY TRANSPORT ECONOMICS
Moscow ERONOMIRA I PLANIROVANIYE ZHELEZNODOROZHNOGO TRANSPORTA.
YAST'I. EKONOMIKA ZHELEZRODOROZHNOGO TR.ANSPORTA in Rus~ian 1978
signed to press 20 Sep 80 pp 7-20, 25-32, 53-61, 75-78, 79-84, 97-99,
135-154, 180-189, 197-203, 212-217, 217-225, 241-245, 246-25~4,
259-265, 292-294, 300-304, 309-323
~[Book edited by Doctor of Economic Sciences, Professor T.V. Belov ar.,d
Candidate of Technical Sciences, Associate Professor M.F. Trikhunkov,
confirmed by The Main Administration of Academic Institutions of the
Ministry ~f Railways as a textbook for railway tsansport techniCal
schools, Izdatel'stvo "Transport," 15,000 copies, 3~2 paqes,
UDC 385+658.062.2:656.2]
CONTENTS
- ~IlOfi&'fil0l7
The Economic Characteristics of the Country~s Unified Transport System 2
1.1. The General Characteristics of the Unified Transport System..... 2
1.2. The Place af the Uni~ied Transp~rt S~rstem in the National
Economy �~~~~~~~~~~~~9~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~� 3
Technical-Econ~mic Charaateris~ics and Spheres of Efficient Use of Types
of Transport 15
2.2. Technical and Economic Characteristics of Types of Transport.... 15
Planning of Railroad Transport 23
Lt.2. Types of Transport Plans 23
L~.3. Main Sections of the Annual Plan 2~
- a - [II - USSR - FOUO]
[III - USSR - 38d FOUO]
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4.1~. Indicators af Plgns Confirmed for the Railroad Network
and Its Subdivisions 25 ,
4.5. The Structure of Plann~ng Bodies 2$ -
4.6. Procedure for De~elopment of P1ans 29
~ Characteristics of the Volume of Shipsnents and F`reight Traffic Turnover �
of Railwa~ Transport of the USSR 31 '
'
6.1~. Nonuniformity of Freight Ship~nents .................a...... 31 !
. ~ , ~
Maldng F`reight Shipments More Efficient and the Economic Effectiveness
of Shipanents 34 ~
7.1. Chaxacteristics of the Main ~rpes of Inefficient Shipments. 31~ ~
7.2. Measures To Elimi.nate Ineffic~.ient Shipments 3b
~
Main Indicators of the Annual Plan of Shipments by Rai1 and Methods '
of Calculating Them ~0 .
9.3. Determining the Scope of Dispatch and Arrival of
Individual Goods 1~0
~ 9.?~. Determining the Reception and ~irnover of Goods 1~2 ~
Economic Analysis of the Quality of Utilizing the Hardware of Railroads. L~14 ;
14.1. Characteristics o.f Economic Analysis of Utilization of �
Hardware ......................................e............ LG1~ ;
. ~
14.4. Reduction of Empty Etun of a F~eight Car 5Lt ;
11t.5. Increasing the Productivity of Freight Cars 55 ~
1Lt.6. Improving the Use of Pa~seng~r Rail Cars 5b I
111.7. Increase of the Weight and Speed of Freight Trains......... 57 ~
~
The Economic Effectiveness of fteconstructing ~action of Railroads...... b3
18.1. Development of Progressive Types of Traction on Railroads.. 63 ~
18.2. The Effi~iency of Electric atld Diesel Zocomotive Traction.. 64
18.3. Advantages of Electrifica~ion on Alternating Current....... 69
18.1t. Spheres of Effective Use of Electric and I}iesel Traction... 69 ~
~
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;
The Economic Effectiveness o~ Developir~g Container Facilities............ 73
~
' 20.1. The Significance of Container Facilities and the Ma,in
' Trends of Developing It 73
; 20.2. The Economic Effectiveness of IIsing Containers 76
! Effectiveness of Constructing New Railroads and Second Tracks............ 80
22.1. The Significance of Ne~z Railroad Construction 80
22.2. The Effectiveness of Constructing New Itailroads and Methods
of Determining It 81
22.3. Effectiveness of Constructing Second Tracks 84
Planning Capital Investments and Ma3or Overhaul.........a 86
23.1. Main Problems of Planning Capital Investments 86
23.2. The Content of the Plan of Capital Innestments 87
23.3. arder of Developing the Plan of Capital Investments 89
23.l~. Planning of Ma3or Overhaul 91
Labor Productivity in Rail Transport 91~
. 25.1. Ind.icators of I,abor Froductivity Q4
~ 25.2. Methods of Increasing Labor Productivity 96
~ Wages in Rail Transport..... 99
26.1. The Essence of Wages 99
. 26.2. The Tariff System 100
26.3. Fo nns and Systems of Payment Used in Rail Transpo rt........ 102
Planning the Operating Expenses of Railroads ............................0 107
28.1. Classification of Railroad Expenses. The Nomenclature of
Expenses......~~~~~~~~~~~~~~~~~~~a~~~~~~~~~~~~~~~~~~~~~~~~� ~.07
28.2. Method of Planning the Operatin~ Expenses of Railroads..... 109
Finances and Cost Accounting lltt
31.Lt. The Basic Stock of Railroads 111t
;
-c-
:
;
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~ V~� V~~ ~VV~W V~./LI V~\Y~
- Railroad Tariffs and Determination of Payments of Shipments 117
32.2. Existing Tariffs for Freight Shipments 117
Planning the F`inances of Railroads. ].22
33~1. Planning of Income...~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~s~~~~~~~� 122
33.2. Planning of Profits 123
33.3. Distribution and Use of Profits 125
33.1~. Planning the Level of Profitability 127
33.5. Economic Incentive F`unds 128
- 33.6. Financing of Capital Construction and Major Overhaul of
Basic Stock 131
33.7. The ~nancial Plan of the Railroad 132
-d-
s.
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ANNOTATION
The economic problems of development and operation of railway transport are outlined
in the �textbook,the characteristics of its material and technical base are given and
the principles and methods of management a~~d planning, the economics of operational
work, the cost of shipments, the wage system, tariffs, finar~cing and cost-accounting
~nd t he material and technical supply on the railroads are considered. The textbook
is intended for students of technical schools and may also be used independently by�
_ those studying the fundamentals of raiiway transport economics.
.
;
~
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. ~ V~~ V~ ~~v~~~~I VV~I V~~LIa
.1'
THE ECONOMIC CHARACTERISTICS OF THE COUNTRY'S UNIFIED TRANSPORT SYSTEM
Moscow EKONOMIKA I PLANIROVANIYE ZI~LEZNODOROZHNOGO TRANSPORTA: EKONOMIKA ZHELEZ-
NODOROZHNOGO TRANSPORTA in Russian Part 1, 1g78 aigned to press 20 Sep 78 pp 7-20
[Chapter 1 from the book "flconomika i planirovaniye zheleznodorozhnogo transporta:
- ekonomika zheleznodorozhnogo transporta," Izdatel'stvc Transport, 15,000 copies, ,
352 pages~
[Text] l.l. The General Characteristics of the Unified Transport System '
The aggregate of the various types of the freight and passenger transport which ~
services production and har.dling processes in the national economy is called the
transport system. ~
All types of mainline transport of the handlinq sphere fozms the country's uriified ;
transport system (YeTS). It includes universal and special types of transport.
Universal transport includes mainline railroads, spur tracks, highways, inland ,
navigable waterways, air lines and maritime lines. These types of transport can
haul both freight a,~d passengers. ,
Special transport includes pipelines and high-v~oltage electric power transmission
lines (LEP) . ;
Special types of transport have an importunt effect on the development o� all types ~
of universal transport and especially of railway transport. For example, partial, ;
economically justified transfer of fuels to pipelines may considerably ease the
work of railroads. Local combustion of fuel and transmission of electric power
, over electric power transmission lines may be more feasible than shipping it by
universal types of trdnsport.
The concept of a complete complex of YeTS hardware, besides the railway network,
includes the rolling stock, all permanent developments including transport ware-
houses and also loading-unloading machines and mechanisms. Millions of trucks, :
many hundreds of thousands of rail cars, thousands of locomotives, ocean-qoing and
river ships and aircraft are used to haul qoods and passenqers in the YeTS of the _
USSR.
More than nine million workers were employed in the YeTS in 1975. '
~
`
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The unity of the transport system is provided by various forms of coordination--
technical, production, economic, organizational and legal.
One of the important tasks of increasinq the efficiency of tha YeTs is to develop `
the scientific fundamentals of its economic unity. This means primarily development
of a unified system for optimum planning of shipments and operation of rolling
stock to create conditions for more efficient distribution of shipments between
the types of transport. Development of a unified planning and accounting system
for transport expenditures in the national economy and improvement of tariffs based
on their unification are also of important significance. The economic unity of the
- transport system can be accomplished successfully on the basis of dev~loping a uni-
fied automated transport control system.
Transport-economic ties in the national economy are becoming ever more complicated
at the current stage of development of economics. Intraproduction freight traffic
volumes are tied directly to those of the handling sphere of transport. This re-
quires clearer tying-in of the overall production technology at enterprises to
organization of shipments. Dissemination of che experience of the Odessa and
Leningrad transport workers, Elektrostal' workers and enterprises of Chelyabinskaya
Oblast and the Southern Urals Railroad is of important significance in this regard.
The transport system of the USSR is unified by its socioeconomic nature. All the
main means of transport are state and public property. They are used in the inter-
ests of the workers. This is one of the decisive advantages of the social transport
system over the capitalist system.
The means of transport in capitalist countries are either privately owned or owned
by the government. For example, all railroads are private in the United States.
State railroads predominate in other countries. But even here they are not public
property, but are used in the interests of the ruling capitalist monopolies.
Another decisive advantage of the socialist transport system is planned development
and utilization of all types of transport. Planning permits proportionality in
development of the national economy and of the transport system servicing it. It
makes it possible to establish economic agreament among the needs of the national
economy and the populace in shipments and the traffic {carrying) capaci'ty of the
transport system. Moreover, planning ensures proportionality in development of
- individual aspects of transport within the transport system and also between in-
dividual services and sections within each type of transport. All this contributes
to the best use of the main means of transport with regard to creation of tihe re-
quired reserves.
Thus, Soviet railway transport has no equal in the world in the level of utiliza-
tion of hardware, freight intensity, volume and economy of operation. With the
length (together with spur tracks) of approximately 15 percent of the worldwide
railway network, it performs almost 55 percent of the freight txaffic turnover of
all the world's railraods. The freight intensity on USSR railroads is six times
higher than on United States railroads and locomoti~ves are utilized 2-3 times bet-
ter and rail cars are utilized 3-4 times better.
The unified transport system of our country is being developed without crises and
depressions, reflecting the continuous growth of the entire national economy. Its
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planned development provides constant, higher effectiveness of capital investments
to transport compared to capitalist countries.
Under the conditions of the scientific and technical revolution the advantages of
socialist economtcs create unlimited opportunities for development of new equip-
ment and improvement of transport production. The USSR ~ccupies first place in
the w~rld on the scales of usinq electric traction on railroads. The success of
the Soviet Union in aevelopn~nt of the maritime fleet and in development of modern
turboprop and jet airliners is undisputed. A strong thrust in development of
high-speed passenger transport by water is development of hydrofoil ships.
An important source of the rapid growth and increase of production efficiency in
the national economy, including that in transport, is the highly conscientious,
creative attitude of inembers of society who Zabor. This is yet another of the
fundamental advantages of socialism over capitalism.
The socialist social order determines all the advantages of the unified transport
system of the USSR and provides the opportunity to organize its operation more ef-
ficiently and to provide high quality of shipments--safe, intact and timely deliv-
ery of passengers and material goods to their points of destination.
I
1.2. The Place of the Unified Transport System in the National Economy ~
I
The place and significonce of the unified transport system in the national economy ;
can be characterized by a number of economic indicators and grimarily by the gross
public product and the national income.
The fraction of transport and communications comprises four percent in gross public
output and approximately six percent in the national income (according to existing
accounting). ~
The specific weight of the unified transport system exceeds eight percent in the
total contingent of workers involved in the national economy. One should bear in
mind in this case that loading-unloading operations are not taken into account in
the main transloading activity of all types of transport, except air transport.
With regard to them, the contingent of workers of the transport system comprises '
approximately 10 percent of all workers and salaried employees. Thus, the transport ;
system is a large consumer o� the country's labor resources.
Transport is one of the most fund-consuming sectors. The cost of all basic funds
of the unified transport system comprises approximately 12 percent of the total cost
of the basic funds of the national economy. The fraction of transport increases to
20 percent in the basic production funds. If the cost of the sidings of industrial
enterprises is added to this, the specific weight of the transport system reaches
25 percent in basic production funds.
The annual capital investments to the transport sphere are significant. They com-
prise approximately 10 percent of the total capital investments in the country's
national economy.
The transport system consumes an enormous amount of material resources of the na-
tional economy. Almost 19 percent of the diesel fuel, more than 90 percent of the
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heating oil, approximately 10 percent of lumber, 6 percent of all electric power
and 4 percent of ferrous metals are directed to it. Almost the entire output of
transport machine-building enterprises and the greatez part of motor vehicle gaso-
line go to transport.
The structure of the material resources consumed by transport does not remain sta-
ble, but varies. Thus, the consumption of pit coal was reduced sharply with regard
to conversion of the railroads to electric and diesel locomotive traction. The
specific weight of transport in consumption of lumber is being reduced. The mass
installation of railroad ties on the railroads and also extension of the service
life of wooden ties contribute to this.
The national economy transfers enormous material valuables to transport for ship-
ment. Approximately 60 million tons of various types of freight with a total cost
of approximately 12 billion rubles are in the process of movement at one time in
transport. The freight en route comprises approximately 35 million tons alone in
railway transport and its costs is more than 9 biliion rubles.
The expenditures of the national economy on transport are high. The total expenses
of the transport system of the USSR (including spur tracks) on freight and passenger
shipments comprise more than 75 billion rubles annually with regard to expenditures
for loading and unloading. Approximately 80 percent of these expenditures go to
freight shipment.
Trans~ort expenditures occupy a significant specific weight in the price of indi-
vidual types of products at the point of consumption. For example, they comprise
an average of 15 percent in the price of oil, 20 percent in the price of pit coal,
35 percent in the price of iron ore, 60 percent in the price of salt and so on. The
fraction of the transport component in the price of a product has a tendencY to in-
crease. This is explained by the fact that an ever greater volume of ton-kilometer
of shipping work goes to each ton of product produced in the national economy.
This trend is typical for most of the world's developed countries.
The t~tal mass of products produced in our country has almost doubled during the
periad from 1961 to 1975. The total transport expenditures increased threefold
during this period. As a result the specific value of transport expenditures per
ton of produced product increased from approximately 7 to 10 rubles.
The index of specific freight traffic turnover plud, which characterizes the amount -
of ton-kilometer shipping work per ton of product produced, is determined by the
ratio of the total freight traffic turnover of all types of transport ~ to the
total volume of product output in tons EQ
_ ~`y~~ ~Qt �
(1�1)
In 1960 the value of the index of specific freight traffic turnover per ton of
product comprised 496 ton-kilometers and in 1975 it comprised 703 ton-kilometers,
i.e.,,it increased by 207 ton-kilometers. This increase was the result of a sig-
nificant increase of the average length of freight shipments in almost all types ~
of transport.
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The distribution of the total expenditures by types of transport is characterized
by the data in Table 1.1.
Table 1.1. F~cpenditures of National Economy By Types of Transport
- .
, � Cyrr~p~r~ie~sp~ncooptrrr ~ toa ~ ~r.5i, ~p�~Tx
' . Diut ~W~QOy''� 'i~Tqre~ � l~epe,o6petlura
;
~':i~ ~ rap~t. PY6.j~~ R r ~YII DY6. ~~y K aror~ _
~~p~o~*pd~ ~6 . . 19,8 26,T 11~,g
AeTOyodasrae~i4~). . . ~8,1 64.9 ~.7 647
1,6 2,2 1~ 3~
Peaol . . ~ . . . 4,~ b,4 B,~
H~~~O ~~~1 0~6 0:~ A,A6 1.1
. ' N* o r o(11) T~.1 . 100,0 ( t~S.6 ~AU.U _
Key : i
1. Types of transport 6. Railway ~
- 2. Total transport expenditures 7. Motor ~
i
3. Billion rubles 8. River ~
4. Percent of total 9. Maritime
5. Including expenditures in hand- 10. Oil pipeline
ling sphere 11. Total
It is obvious from the table that approximately 92 percent of the total expendi- -
tures of the transport system (without regard to air and gas pipeline transport)
in almost 88 percent of the expenditures for transport in the handling sphere go
to motor and railway transport.
The distribution of expenditures between various types of transport does not agree
with the distribution of the volume of transshipping work between them. Thus,
railway transport of the handling sphere (without spur tracks) carries out more
than 62 percent of the freight traffic turnover and approximately 42 percent of the
passenger traffic turnover. However, its expenditures comprise only 33 percent of
the total expenditures of the transport system in the handling sphere, whereas the
fraction of expenditures of motor transport, which carries out 6.5 percent of the
freight traffic turnover in more than 40 percent of passenger traffic turnover,
reaches almost 55 percent. This situation is explained by the high cost of ship-
ments in motor transport. Four-fifths of the total volume of freight shipment and
the overwhelming majority of the volume of passenger shipment are included in this
iraction. The average length of freight and passenger shipments in motor trans-
port is tQns of times less than that on railroads. Moreover, motor transport
carries out a large volume of intraproduction shipments whose cost is even higher -
compared to the average.
Improvement of the operation o� the unified transport system is of important sig-
nificance for increasing the efficiency of all social production. Reducing trans-
port expenditures by only 1 percent yields a saving of approximately 750 million
rubles annually on the scale of the national economy.
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1.3. Indicators of the Density of the Transport Network
The Soviet Union with its enormous territory (22.4 million km2) has a long transport
network. The length of the tracks is increasing every year. The network of new
types of transport--motor, pineline, air and electronic (electric power transmission
lines)--is increasing at especially high rates.
The dynamics of grawth of the length of the transport network is shown in Table 1.2.
Table 1.2. Length of Railway Network, thousand kilometers
~
i
~ ` Type of Railways
1950 1960 1970 1975
General-purpose railroads 116.9 125.8 135.2 138.3
i
Spur tracks (including narrow-gauge) 102.5 120.8 1305. !
_
Inland navigable waterways 130.2 137.9 144.5 145.4
_
Paved highways 177.3 270.8 511.6 660.5 ~
Oil pipelines and mainline petroleum 5.4 17.3 37.4 56.6
product pipeline ! '
i
I '
Mainline gas pipelines 2.3 21.0 ~ 67.5 9g.2 ~
I
ir lines (within the USSR) 300.5 375.2 596,0 645.0 ~
High-voltage electric power transmission 31.4 124.4 445,5 604.8
lines (with voltage more than 35 kV)
- It is also important to note the relative indicators for the characteristics for
the degree of saturation of the country with the transport network, besides the
absolute dimensions of the length of tracks. A number of these indicators is used. -
Let us consider the following of them:
~Y
the indicator which characterizes the density of the network dt as the ratio
of its length L to the area of the country's territory S,
,d=a S , -
(1.2)
~'his indicator is usually measured in kilometers of length of the network on 100 ~ -
or 1,000 ]an2 of territory;
the indicator which characterizes the density of thA network dn as the ratio
of its length to population N,
L
~ N~
(1.3)
This indicator is usually calculated in kilometers of the length of the network per
thousand residents;
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the indicator which characterizes the relative density of the network, deter-
mined from the dimensions of the country`s territory and its population,
_ L_
dra = v
N � (1. 4 )
The most generalized relative indicator of the country's saturation with a trans-
port network, along with territory and papulation, takes into account the total,
volume of products produced in the country Q expressed in weight. It is determined
by the formula
- - : - .
dT~~ (1.5)
Different types of corrections are used to find the most comparable indicators of
the density of the transport network by countries or regions of a given country.
First, the entire territory is divided into inhabited (with per capita population
of more than one person/km~) and uninhabited and the indicators ar~ de~ermined for
- all the territory and only for inhabited territory. Some indicators of the density
~ of the transport network of the USSR in 1975 are presented in Table 1.3.
Table 1.3. Densit of Trans rt Network of USSR
Len th of Railways1 km
Per 100 km2 of Territor
Type of Railways Per 10,000 Only
Residents All Inhabited
Railroads (including spur tracks) 10.7 1.15 1.82
Inland navigable waterways 5.8 0.65 0.98
Paved highways 26.4 2.90 4.26
Oil and petroleum product pipelines 2.3 ~ 0.25 0.33
Gas pipelines 3.9 0.44 0.63
Total 41.9 5.39 8.02
As can be seen from the table, the best indicators of providing the territory and ~
populace with a railway network are motor and railway transport.
Second, railways themselves which, as is kn~wn, are distinguished by their techni-
cal equipping and traffic and carrying cagacity, are also reduced to comparable
form. To.do this, the �ollowing correcting ratios are used, for example: 1 km of
ordinary paved highway is equivalent to 0.15 km of one-track railroad, while 1 lan
of improved paved highway is equivalent to 0.45 km of one-track railroad. The
density of pipelines as corrected with regard to pipe diameter since thei.r carrying
capacity depends to a great extent on this.
The corrected indicators more accurately reflect the level of development of the
country's transport system and its 5aturation with all types of railways. �
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1.4. Main Results and Prospects for Development of the Unified Transport System
~ The development of all sectors of the national economy, the growth of the popula-
tion, an increase of the cultural level and standard of living of the workers and _
also expansion of international ties of our country are accompanied by continuous
and rapid growth of freight and passenger traffic turnover of the transport system.
As can be seen from the data of Table 1.4, the absolute dimensions of freight and
passenger traffic turnover increased in all types of transport during the period
from 1951 to 1375. The freight ~raffic turnover of oil pipeline, marine, motor
and air transport increased at the highest rates. Passenger traffic turnover in-
creased more rapidly in air and motor transport.
The growth of freight traffic turnover of the transport system occurs both due to
an increase of the volume of freight shipments in tons and due to the increase of
the average length of their shipment in all types of transport with the exception
of river and maritime transport. Higher rates of development of new types of
transport have a significant effect on variation of the specific weight of each
type of transport in the total freight and passenger traffic turnover (Table 1.5).
In this case the specific weight of railway and river transport is decreasing
continuously, while that of motor and oil pipeline transport is increasing. The
specific weight of maritime transport in cargo shipments decreased appreciably
during 1971-1975.
Under modern conditions, each percentaqe of increase of freight traffic turnover
of the transport system yields a total of more than 50 billion t-km, including more
than 30 billion t-km in railway transport.
The relationship of tre freight traffic turnover of individual types of transport
varies significantly if the foreign trade export-import shipments are excluded from
the total freight traffic turnover. In this case the specific weight of railway
transport in internal freight traffic turnover of the USSR increases to 75 percent.
Thus, as before, the railroads remain the main type of transport in servicing the
freiqht shipments inside the country.
Motor transport occupies first place in the transport system by the volume of
freight shipped in tons. Approximately 80 percez~t of the total volume of freight
shipments goes to it, or five times more than to railway transport and almost two
times more than to all remaining types of transport taken together. The insignif- -
icant specific weight of motor transport in the country's freight traffic turnover
is explained by the small average distance of freight shipment by trucks, which
comprised approximately 16 km in 1975 compared to 466 km in river transport, 1,338 _
km in oil pipeline transport, 3,68L km in maritime transport and 894 km in railway
transport.
The relationship of individual types of general-purpose transpart in passenger
traffic turnover varies appreciably (compared to the data presented in Table 1.5)
if intracity passenger bus shipments are excluded from it. Thus, the specific
weight of mainline railroads increases significantly in intercity passenger traffic
turnover. It comprised approximately 55 percent in 1975 with average distance of
a trip b~ passengers of 657 ]an in intercity traffic. The average distance of a
passenger trip by rail comprises 90 km in all traffic.
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Air transport, which has the highest average distance of passenger shipments of
1,331 km, occupies second place in intereity passenger traffic turnover (more than
20 percent). The average distance of i.ntercity passenger shipments by general-
purpose buses is low--approximately 35 km, while the average distance of all pas-
senger automobile shipments is even less--8 km. Therefore, motor transport occu-
pies third place (approximately 15 percent) in intercity traffic of passenger
traffic turnover, although it is inferior only to railway transport in the total
volume of passenger shipment. Water transport does not yet play a significant -
role in the country's total and intercity passenger traffic turnover.
Thus, railway transport as before retains its decisive significance in the field
of passenger shipments.
The continuous growth of freight and passer~ger shipments requires corresponding
technical equipping of the transport system. An enormous volume of work was car-
ried out during the period 1951-1975 in the USSR to strengthen its material and
technical base.
The length of the railroad network was increased by more than 18 percent during
this period. Construction of the world's largest Baikal-Amur Mainline Railroad
was begun in 1974. Conversion of railroads to progressive types of traction--
electric and diesel--was essentially completed. The total length of the railroad
lines serviced by these types of traction exceeded 130,000 lan, which comprises 94
percent of the operational length of the railroad network. In 1975 electric and
diesel traction performed 99.6 percent of all freight traffic turnover of railway
~ transport. The specific weight of diesel and electric locomotives in shunting work
reaches 89 percent.
Extensive measures have been carried out to strengthen the output of the upper
structure of the track--laying heavy type rails, installation of crushed stone
ballast, concrete reinforced ties and jointless track. The locomotive and rail car
fleets were supplemented with more improved rolling stock--powerful electric and
diesel locomotives, eight-axle gondolas and high-capacity tank cars. The length of
the lines equipped with automatic block systems and centralized traffic control was
increased.
The length of paved highways increased 3.7-fold. The fleet of trucks was supple-
mented with vehicles of various types and capacity (from 0.4 to 65 tons or more).
State trials of BelAZ-549 dump trucks with capacity of 75 tons have been completed.
Multiwheel truck trains-coal carriers with capacity of 120 tons have been developed
and investigations are being carried out to develop even more powerful dump trucks
(with capacity of 180 tons). The specific weight of specialized dump trucks de-
signed to transport bulk freight, tank trucks, refrigerator trucks and truck-
tractors for shipment of perishable products, milk, flammable goods and containers
was increased in the truck fleet.
Comfortable and large-capacity ZzL, LAZ and other buses were developed to haul
passengers in intercity and intracity communications. The fleet of compact auto-
mobiles was supplemented with modern types of machines such as Chaika, Volga, Zhi-
guli, Moskvich and Zaporozhets,
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~
The Soviet Union is a great maritime power. The total tonnage of the commercial
maritime fleet of the USSR exceeds 17 million tons. The fleet contains ships of
different c3pacity, including large tankers for shipment of petroleum products.
During the past few years the fleet was considerably supplemented with highly
economical universal and specialized ships with high degree of inechanization of
loading-unloading operations. A Soviet supertanker of the new series "Mir" with '
capacity of 150,000 tons has been constructed. Construction of container-carrier
ships has been expanded for shipment of large-capacity containers. Construction ,
of container-carrier ships with roll-on-roll-off handling, which can carry approx-
i.mately 230 20-ton cantainers, is planned. Ships of even greater capacity--no less
than 1,100 large-capacity containers--will be constructed in the future.
The passenger fleet was supplemented with new large-capacity ocean liners. Power-
ful icebreakers, including the atomic icebreaker "Arktika," which was the first in
the world to reach the nort.h pole, have been developed to increase the navigation
season through the Northern.Sea Route.
Extensive qualitative changes have also occurred in river transport. Development
of a unified deepwater river system in the European USSR has been essentially com- -
pleted. Ships with diesel power plants comprise the main fraction of self-propelled i
river cargo ships. The nonself-propelled river fleet has been completely renovated; i
barges are now constructed mainly with metal hulls. Ships of an essentially new ~
class--mixed river-sea navigation and twin-hull catamarans--have been developed.
Capacity has been increased and the speed and safety of ship traffic on the rivers ~
has been increased.
Passenger hydrofoil ships of the "Raketa" and "Meteor" class, having speed of 60-70 ;
)an/hr, appeared for the first time in the Soviet Union. Construction of air-cush-
ion ships, which provide speed up to 120 lan/hr, has begun. Comfortable two- and
three-deck motor ships with capacity up to 350 persons and with speed of 25-26
km/hr are being used to ship passengers over long distances.
Air transport has achieved extensive development. A new qualitative jump in devel-
opat~ent of civil aviation occurred in the mid-1950s when jet and later turbojet air- ,
craft appeared on the country's air routes. The first of them was the TU-104 with
capacity of 100 passengers, designed for flight altitude of 8-9 km at a speed of _
800-850 km/hr.
Further technical progress was related to the rapid increase of aircraft capacity,
their speed, altitude and nonstop flight range. TU-134, TU-154 wnd IL-62 aircraft
are now operating on the air routes of the USSR in long-range flights and YaK-40
and AN-24 aircraft are operating on local lines.
The world's first supersonic passenger aircraft, the TU-144, with capacity of 120 -
passengers was developed in our country. The speed of tnis aircraft is 2,500 lan/hr,
the calculated flight range is 6,500 laa azid the flight altitude is 20 km. The .
world's largest cargo aircraft, the "Ante,y" (AN-22) with capacity of 80 tons, was
constructed in the USSR.
Helicopters have achieved extensive distribution. Soviet designers have developed
many different types of helicopters including super-powerful types.
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- Pipeline transport was developed at the highest rates. The total length of main-
line oil pipelines and petroleum product pipelines increased more than tenfold
during 1971-1975 and the length of gas pipelines increased 43-fold. The total
1.ength of both comprised 156,000 ]Qn in 1975. Primarily large-diameter pipelines
of 1,020 and 1,220 mm are now being constructed in the USSR. Pipes with diameter
of 1,420 mm are being developed for petroleum products. The task of further in-
creasing pipe diameter fo 2.5 meters, primarily for gas, is being posec~.
Soviet industry has also developed a sys~tem of powerful pumping installations and
other equipment. Special pipeline systems are beinc; developed for moving mass bulk
goods (coal, ore, construction materials, grain and so on) in containers and
capsules.
Extensive measures for further increasing the efficiency and work quality of rail-
road and other types of transport were provided by the decisions of the 25th CPSU
Congress and by the decree of the CPSU Central Committee and USSR Council of ~
Ministers: "On measures to develop railway transport in 1976-1980."
The freight traffic turnover of the transport system will increase by approximately
30 percent during the lOth Five-Year Plan and passenger Lraffic turnover of general-
purpose transport will increase by 23 percent.
Freight traffic turnover in railway transport will increase by approximately 22 per-
cent and passenger traffic turnover will increase by 14-15 percent. It is planned
to put into operation approximately 3,400 km of. new railroad lines and 4,000 km of
second tracks and two-track inserts, to electrify 4,500 lan of railroads and to equip
16,000-17,000 km of railroads with block systems and centralized traffic control.
~ A total of 2,200 electric locomotives, 6,400 sections of mainline diesel locomotives
and 2,500 diesel shuntinq locomotives, more than 400,000 freight cars and 16,600
passenger cars and 270,000 containers will be delivered to railway transport during
= the five-year period. The level of complex mechanization of loading-unloading oper-
ations will increase to 93 percent and labor productivity will be increased by 18-
20 percent,
- The cargo traffic turnover of maritime transport will increase approximately 1.3-
fold. The capacity of maritime ports will be strengthsned primarily by construction
of specialized transloading complexes with docks having total length of 5.3 km. The
fleet will be supplemented with highly productive dry-cargo, tanker and combination
ships with total tonnage of approximately five million tons of deadweight.* The
fraction of the specialized dry-cargo fleet--timber carriers, container carriers,
lighter carriers, trailer carriers, ships designed to transport bulk goods and
other ships--will be increased.
Cargo traffic voltune will be increased by approximately 22 percent in river trans-
port. Mechanized docks with total lenqth of approximately 6]an will become opera-
tional. The river transport fleet will be supplemented with large-capacity barges,
pusher-tugboats, cargo motor ships with increased capacity, including ships of
river-sea mixed navigation, small-capacity ships for shipment of cargo on small
rivers and also more improved types of passenger ships.
*
Deadweight is the total capacity of a ship, including all supplies (fuel, water
and so on) required for navigation.
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Pipeline transport will achieve further development. Approximately 18,500 km of
oil pipelines and petroleum product pipelines will beceme operational during the
five-year period and automated production control systems will be developed and
intraduced on the main pipelines.
Freight traffic turno~er will be increased by ~5 percent in general-purpose motor -
transport, while passenqer traffic turnover will be increased by 28 percent in bus
transport. It is planned to construct and reconstruct no fewer than 65,000 paved
highways during the five-year period.
Shipme.zts in ?ir ~:rans~rt, especially ov~r 3ong dis*.anc;es and i.n difficultly ac- �
cessi.ble regions, will achieve further development. The passenger traffic turnover
of air transport will increase 1.3-fold. Operation of new passenger aircraft such
as the IIr86 (air buses), YaK-42 and cargo aircraft of type Iir 76 will begin anc7
research will continue to develop new aircraft c~rresponding to the future needs of
development of civil aviation. Introduction of equipment systems which p~ovide ,
automation of air traffic control and takeoff and landing of aircraft is provided ;
on wider scales.
The main task of the unified transport system during the lOth Five-Year Plan remains ~
more complete and timely satisfaction of the needs of the national economy and of i
the populace for shipments. To do this, it is planned to further strengthen the
traffic and carrying capacity of all types of ineans of con~nunication included in the
transport system. An increase of the rating and capacity of transport facilities,
specialization of them and an incre~se of speeds are the main trends in development �
of the transport system for the future. Increas3ng the rating of the entire trans-
port system and improving the quality of its operation will be accomplished simul-
taneously with further improvement of transport ties between the economic regions '
of the country. ;
COPYRIGHT: Izdatel'stvo "Transport", 1978
~
6521 ~
CSO; 811aL~/o359
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TECHNICAL-ECONOMIC CHARACTERISTICS AND SPHERES OF EFFICIENT USE OF TYPES OF
TRANSPORT
Moscow EKONOMIKA I PLANIROVANIYE ZHET,EZNODOkOZHNOGO TRANSPORTA: EKONOMIKA
� 2HELEZNODOROZHNOGO TRANSPORTA in Russian Part 1, 1978 signed to press 20 ~ep 78
pp 25-32
[Excerpt from Chapter 2 of the book " Ekonomika i planirovani~re zheleznodorozhnog~
transporta: ekonomika zheleznodorozhnogo transporta," Izdatel'stvo Transport,
15,000 copies, 352 pages]
[Excerpt] 2.2. Technical and Economic Characteristics of Types of Transport
Railway transport. The main advantaqes of railway transport are its ur~i~versality,
regularity of shipments during the entire year and its enormous carrying capacity.
Thus, the carrying capacity of a single-track electrified line reaches 20-27 mil-
lion tons annually in one direction, while that of a two-track line completely
outfitted with modern technical equipment reaches 90 million tons or more.annually.
However, construction of railroads requires extensive expenditures of labor and
energy resources, metal and other material goods. The cost of constructing 1 km of
single-track railroad under averaqe conditions comprises approximately 300,000-
500,000 rubles, and under the difficult conditions of the Arctic, in swamp and
mountainous terrain, it is 2-3-fold higher. Expenditures of inetal (without roll-
- ing stock) comprise 130-200 tons per kilometer. Construction of a two-track line
costs 60-70 percent more than a single-track line.
Specific capital investments and operating expenses on railroads depend to a sig-
nificant degree on the volume of shipments. Capital investments in permanent facil-
ities and expenses to maintain them have an important effect on the value of these
indicators. These expenditures do not depend mainly on the volume of shipments and
go to an even less extent to unit product with an increase of it. Thus, a decrease
of the total specific capital investments and operating expenses is provided. For
example, independent expenses comprise 2-3 kopecks per 10 t-lan with freight intens-
_ ity of 5 million t-km/km annually, while these expenses are reduced to 1-1.3 ko-
pecks with freiqht intensity of 20 million t-km/km. Therefore, railroads can be
constructed to assimilate a siqnificant volume of mass freight turnover and also
freight traffic volume having high rates of qrowth during an extended time period.
Specific capital investments comprise approximately 15 kopecks/10 t-km with average
freiqht intensity of railroads equal to 22.6 million t~km/km. Of this, 12 kopecks
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� V~\ V~ ~ ~V~(1a+ VV~ v~ ~La
qoes to perm~nent facilities and 3 kopecks go to rolling stock. The cost of rail- .
way freight shipments is equal to 2.478 kopecks/10 t-km. T'~.e cost of shipments is
2.5-3-fold higher in passenqer traffic, while specific capital im*estments are
3~4 times higher than in freight traffic.
The rate of delivery by rail transport comprises an average of 260-270 lan/day for
all freight. It increases to 350-370 km/day when freight is shipped by block
trains.
The labor productivity of a single worker engaged in shipments exceeds 1.7 million ,
reduced ton-kilometers. ~
Indicators of the cost of shipments and labor productivity are presented in Table ,
2.1 for types of transport.
Table 2.1. Cost of Shipments and Labor Productivity in Transport
~ Cost of Shipments Labor productivity
Type Aof freight, of passengers, of one w~rker,
of kop/10 t-km kop/10 pass.-km thous. reduced t-km
Transport 1970 1975 1970 1975 1970 1975 '
Rail 2,341 2,478 5,455 6,063 1,382 1,715 I
~
River 2,450 2,590 15,510 17,,530 1,651 2,014 ~
Maritime 1,460 1,980 47,180 64,030 7,635 8,008
Motor 57,130 50,510 9,850 10,040 114 160.6
(general-
purpose)
River transport. The seasonality of work, extensive winding of the route, depend-
ence on weather conditions (drying up of unregulated rivers in summer and storm
conditions on rsservoirs and large rivers) and the low speed of carqo delivery ar.e
typical for river transport.
The length of the navigation season on the rivers of our country fluctuates from _
100 days annually in the Knlyn?o-Indiqirka Shipping Line to 27 days in the lower
branch of the Volga, Don and Dnepr Rivers. Many rivers cannot be used for naviga-
,~ion due to their shallaw depths. These rivers are used only for floating timber
during the spring season.
Due to thQir winding nature, the route along rivers is longer in most cases than
along railroads. An increase of the river route comprises an average of 20-25 per-
cent in regions with a developed railroad network. However, the ratio of the ~
length of river and railroad routes significantly deviates from the average on
some lines. For example, the distance by water between Moscow and Astrakhan' is
two times greater than by rail. The water route between Zaporozhe and Kiev, ICAtlos
and Arkhanqelsk is considerably shorter than the rail xoute.
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The average speed of cargo delivery on rivers is lower than on railway transport
and comprises 100-150 lan/day. This is related to the significant increase of water
dray to ship traffic when they increase speed. Thus, the specific drag on rivers
is 6-10 ti.mes less at low speeds (3-6 lan/hr) than in railway transport. But drag
increases with an increase of speed in proportion to the square of speed, while the
consumed power of the ship engines increases in proportion to the cube of speed.
The speed of cargo delivery in river transport differs by types of shipments. Raft
timber is delivered at the lowest speed (60-80 }an/day) and cargo transported in
self-propelled ships is delivered at the greatest speed (280-350 km/day).
The average cost of river cargo st.ipments is close in value to the cost of railway
shignents. However, the length of the navigation season, the type of shipments,
- type c~f fleet, type af cargo and capacity of ships have an important effect on the
cost of river shipments. Therefore, differences in cost are sharper by shipping
lines than by individual railroads. Whereas the highest cost indicators in rail~�~ay
transport (on dead-end raiZroads) exceed the lowest by a factor of 3-4 (on railroads
- with predominance of transit shipments), this ratio reaches 1:20 in river transport.
Thus, the cost of cargo shipments in the Volga Combined Shipping Line comprises
approximately 1.3 kopecks /10 t-km, while that in the Kolymo-Inigirka Shipping Line
(the shortest navigation season) comprises more than 20 kopecks/10 t-km. Extending
the length of the navigation season by using powerful icebreakers is of important
significance to reduce the cost of river shipments. A reduction of the cost is
provic3ed for all elements of expenditures in this case.
Cost differs si5,yficantly by the types of shipments and the type of fleet. Raft
timber and petroleum goods are delivered at the least cost (2-3 times iess ~han that
on railroads). Shipments by barge ~re somewhat less axpensive than by self-propel-
led ships due to the lower specific expenses to maintain barges and the higher
productivity of pusher tugs.
Passenger shipments by river motor ships are 2-3 times less expensive than shipments
by train. The average co st of passenger shipments on river transport comprises
more than 17 kopecks/10 passenger-km. However, the level of comfort offered the
passengers is considerably higher on river v~ssels. Therefore, trips on motor ships
attract a large number of passenger-tourists. The influx of passengers to river
transport increased signif icantly, especially in suburban zones, during the past
few years with constructi~n of nydrofoil ships, which have a speed of 60-80 km/hr.
Specific capital investments in barqes on river trans~rt is 2-3 times higher for
dry cargo than in railway transport and is somewhat lower in permanent facilities.
Canals and dams which require high monetary expenditures usually solve a number of
other national economic problems. Therefore, the fraction of expenditures to per-
manent facilities related to cargo shipments is lower in most cases in river trans-
port than in railway transport.
One of the factors which delays intensive development of river shipments in our
country is some nonconformity be~::ween the direction of flow of rivers and the di-
rection of mass freight traffic volume. This disadvantage is eliminated by organ-
izing mixed rail-river sh ipments which now comprise more than one-third of the
freight traffic turnover of river transport. However, mixed rail-water shipments
are not always economical in regions with a dense railroad network. Therefore,
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technical and economic calculations must be made when organizing shipments with
participation of river and railway transport. Mixed rail-water shipments between
- points not connected by rail are usually advantageous economically with 1ow density
of Lhe railroad netw~ork. The greatest economic effect is achieved upon devia~ion
from direct rail communications to mixed communications of tanker, loose and bulk _
cargo .
The le~el of labor productivity in river transport is somewhat higher than in rail-
way transport and comprises more than two million reduced t-km per worker.
Maritime transport. The most important advantage of maritime transport is the un-
limited carrying and traffic capacity, lang navigation season, directness and hor-
izontal nature of the route and the hiqh capacity of ships.
There are no expenditures in maritime transport for maintenance of maritime routes,
with the exception of canals, th~ length of which is comparatively short.
The average length of the navigation season in maritime transport of the USSR com-
prises 330 days. But some ports (Murmansk, Liyepaya, Novorossiysk, Batumy and
Vladivostok) operate year-round.
- The rate of cargo delivery by sea is higher over long distances than by rail and
fluctuates from 350 ]an/day for dry-cargo carriers to 550 km/day for petroleum
products. The average cost of maritime shipments comprises 1.98 kopecks/10 t-km.
The cost of shipment depends to a significant degree on the type of navigation
(foreign, major coastal shipping and minor coastal shipping) and the type of cargo.
The cost is the lowest (approximately 1.2 kopecks/10 t-km)in foreign shipping over
long distances. The highest cost of maritime shipments is minor coastal shipping
(approximately 4 kopecks/10 t-]an). There are significant differences in the cost
of shipments by the types of vessels as well. Thus, the cost of shipment of petro-
leum.goods in tankers is 2-2.5 times less than that of dry-cargo carriers.
Capital investments in ports and port facilities are significant in maritime trans-
port. However, the specific expenditures are low with high productivity of load-
ing-unloadinq machinery and with long shipping distances.
With regard to the comparatively high rates of delivery, large capacity of ships
and significant shi.pping distances, labor productivity in maritime transport is
very hic*h and comprises more than 8 million reduced t-3an per worker.
Passenger shipments by maritime transport are more expensive than railway and air
transport. ThPrefore, maritime passenger transport is mainly utilized as tourist
transport. The influx of passengers to maritime transport in the country's resort
zones is increasing significantly with supplementation of coastal passenger lines
with hydrofoil vessels of the "Raketa" and "Meteor" class.
Motor transport. This type of transport is characterizes by hiqh maneuverability
and mobility, ths possibility of delivering goods direct from the warehouse of the
shipper to that of the consumer and relatively high rate of delivery.
The average cost of freight shipments in motor transport comprises 50.51 kopecks/
10 t-lan. This is approximately 20-25 times higher than the average cost of rail _
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shipments. But if one determines the cost under comparable conditions, then
freight shipments over short distance are more expensive by rail than by motor
transport.
The degree of utilization of the truck fleet in time and mileage, the technical
state of the fleet and the coridition of the roads have a significant effect on the
cost of motor shipments. Trucks are still inadequately utilized at present. Thus,
the operating time uf trucks comprises a little more thar, 9 hours per day. Approx-
imately half of a11 trucks travel the return trip empty and approximately one-third
are idle for repair or awaiting repair. The highest cost is achieved in freight
shipments in truck-trains on paved roads. Z'hey are one-half tn one-third lower on
the average.
Capital investments in highways fluctuate from 30,000 rubles (improved dirt roads)
to 1-2 million rubles (motor expressways) per kilometer of route. Operation of
motor vehicles is also possible on dirt roads, which is very important in some
cases to develop small volumes of freight and passenger shipments.
The average rate of freight delivery by truck comprises approximately 350-400 km/
day. It is somewhat higher on intercity lines and lower on intracity lines.
Labor productivity in motor transport is the lowest and comprises 160,600 reduce3
t-km per worker. This is explained by the low capacity of the vehicles, the rela-
tively low qualitative indicators of their utilization, the large number of mainten-
ance staff and the insignificant average distance of shipments.
Due to its high maneuverability and mobility, metor transport is a convenient and
inexpensive type of intraci~y and suburban communications. The specific weight of
vehicles in city transport shipments comprises more than 60 percent.
Air transport. The advantages of air transport include high speed, the straightest
line of the route, all-terrain capacity and long range of nonstop flights.
The cost of freight shipments in air transport is 60-7U times higher than in rail-
way transport and now comprises an average of 16~ kopecks/10 t-km. The high cost
is related to the high soecific rating of the engines required to move one tone of
cargo through the air and by the high cost of fuel. It depends on the type of
aircraft. The lowest cost is on turboprop and turbojet aircraft compared to the
average and the highest cost is on piston aircraft.
The cost of passenger shipments is much lower than freight shipments, which is ex-
plained by the differences in the weight of passengers and freight. Passengers and
freight are transported in air transport mainly by the same types of aircraft. The
average weight of a passenger with regard to the weight of hand luggage is equal to
90 kg. Consequently, the cost of transporting passengers will be on the average as
low as the cost of freight shipment as is the weight of a single passenger is less
than the weight of one ton of cargo, i.e., 10-11 times.
The weight of the shipped tare of rail cars rather than the weight of passengers
has the main effect on formation of operatinq expenses in passenger shipments in
rail transport. There is an average of 1.8 ton of rai7. car tare per passenger and
0.8 ton of weight of rail car tare per ton of freight.
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The ratio is different in air transport. On1y 0.2~4 ton of the service weight of
the aircraft goes to each ~assenger and 2-3 tons of the service weight goes to
each ton of cargo.
Organization of air communications requires no expenditures on construction and
maintenance of route. Significant capital investments ars rec~uired only in con-
struction of airfields. However, the expenditures per kilometer of route are lok�er
in air transport than in railway transport over long distances with a large number
of scheduled flights betw~een air fields. .
The average rate of shipments in air transport comprises approximately 400 km/hr
and the rate of piston aircraft is less than 300 lan/hr, the rate of turbopr.op air-
craft is 600-650 kr.~/hr, that of turbojet aircraft is 800-900 km/hr and that of the
supersonic TU-144 is 2,500 ]an/hr.
The ranqe of nonstop flight on different types of aircraft fluctuates from 500 lan
(the YaK-40) to 10,000 km (TU-144). Air routes are an average of 20-25 percent r
shorter than railway routes and 35-50 percent shorter than river routes.
, The high speed of air communications permits modern powerful aircraft to achieve
enormous carrying capacity. Thus, an express train with 720 seats having average ;
route speed of 50 lan/hr has carrying capacity of 36,000 passenger-km/hr. The '
IL-18 aircraft with 100 seats and speed of 650 }an/hr provides carrying capacity of i
65,000 passenger-km/hr, while ti~e TU-114 with 170 seats at a speed of 800 km/hr f
provides a capacity of 136,000 passenger-km/hr.
The disadvantages of air transport, besides the high cost of shipments, should in-
clude some dependence on weather conditions. But improvement of the equipment and
technology of "blind" flight and automation of aircraft landing significantly re-
duce the effect of this factor on the regularity of flights.
Pipeline transport. This type of transport includes oil pipelines, petroleum ~
product pipelines and gas pipelines. The important advantages of pipeline transport
are the absence of rolling stock and as a result of empty runs, a significant re-
duction of loss of goods and stable operating conditions regardless of the season
of the year and climatic conditions.
- The cost of pumping oil and petroleum products over pipelines is one-half to one-
third that of shipping them by railroads and comprises an average of 0.96 kopeck/ ~
10 t-]an. It depends to a significant degree on the pumping distance due to the ab-
sence of loading and unloading operations.
Expenditure for maintenance of permanent facilities, hardly dependent on the volume
of pumpinq through pipelines, occupy a large specific weight in the total volume of ~
operating expenses. Therefore, flow capacity can be increased to reduced cost by
laying large-diameter pipes (1,020-1,220 mm or more).
The viscosity of petroleum products and the degree of loading the pipelines have an
important effect on the cost of pumping. The cost is reduced significantly if sev-
eral different petroleum products are pumped sequentially over the same pipeline,
thus providing a high degree of loading at low capacity of individual flows.
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Specific capital investments in pipelinE~ transport are considerably lower than in
railway transport. Z'hus, construction of 1 km of pipeline requires approximately
one-half the expenditures than construction of 1 km of railroad of the correspond-
ing carrying capacity.
The pumping rate of petroleum goods comprises 70-80 }an/day. It is somewhat higher
over large-diameter pipes due to the lower specific drag.
~ Labor productivity is highest in pipeline transport, which is provided by a high
degree of automation of pumping processes and high annual capacity of pipelines.
The level of labor productivity exceeds 12 million t-3an per worker.
Electronic transport. The length of electri.c power transmissinn lines (LEP) com-
prises more than 600,000 km in the USSR and the generation of electric power com-
prises more than 1,000 billion kW�hr an~,iually. The main part of electric power
(approximately 80 percent) is generate~~ at thermoelectric power plants.
The advantages of electric power transmission lines over other types of transport
are very great. Thus, if electric energy were generated at the point of its con-
sumption, the shipments on railway transport would increase by 14 percent. This
- would require enormous capital investments in rolling stock, development of the
, carrying capacities of railroads and also the capacities of the corresponding
sectors of ferrous metallurgy, machine building and so on. The required capital
investments exceed many times those related to development of LEP, _
An undoubted advantage of electronic tzansport consists in the possibility of fast _
maneuvering of energy within the energy system and also between individual energy
systems. The disadvantages should include the high losses of electric power during
transmission, especially over long distances.
One should bear in mind that some incompatibility of these indicators should be
taken into account when comparing types of transport by the average indicators of
labor productivity and cost of shipments. Thus, the average indicators of the cost
of shipments are calculated with different average distance, which varies from 16.1
km in motor transport to 3,681 lan in maritime transport. Moreover, the cost of
shipments on various types of transport also includes different groups of expendi-
tures. For example, expenses for. ~.iaintenance of track facilities, which comprise
approximately 15 percent of their total value, are included in the cost of railway
shipments. This group of expenditures is not included in the cost in river and
motor transport.
The differences in freight intensity, which have an important effect on the ave.rage
cost o� shipments, are also very significant,
Section indicators of the cost of shipments calculated under comparable conditions
deviate significantl~~from average indicators.
Consequently, it is impossible to use average indicato.r.s of cost when determining
the effectiveness of transfer of freight traffic nolume from one type of transport
to another. -
The incompatibility of the indicators of labor productivity occurs due to differ-
ences in the rates of delivery, in the composition of the operating contingent and
,
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also due tn differences in shipping conditions. Thus, the staff engaged in track
maintenance is not included in the operating contingent in river and motor trans-
port, whereas workers engaged in track repair are taken into account in the operat-
3ng contingent on railroads.
COPYRIGHT: Izdatel'stvo "Transport", 1978 _
6521
CSO: 81L~/0359
~
,
R,
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- PZANNING OF RAILROAD TRANSPORT
_ Moscow EKONOMIKA I PLANIROVANIYE ZHELEZNODOROZHI~IOGO TRANSPORTA: EIGONOMIKA
ZHELEZNODOROZHNOGO TRANSPORTA in Russian Part 1, 1978 signed to press 20 Sep 78
pp 53-61
[Excerpt from Chapter 4 of the book "Ekonomika i planirovaniye zheleznodorozhnogo
transporta: ekonomika zheleznodorozhnoqo transporta," Izdatel'stvo Transport,
15,000 copxes, 352 pages)
[Excerpt] 4.2. Types of Transport Plans
Future, annual (fiscal) and operational (quarterly and monthly) plans are developed
in railway transport, as in the entire natianal economy.
Future plans include the five-year plan and long term plans calculated for 10 years
or mcre. The main directions and most important indicators for development of the
national economy and its sectors are established in the future plans. The need to
develop future plans is caused by the fact that implementation of important recon-
structive measures in railway transport, for example, such as construction of main-
line railroads, double tracking, development of new powerful types of locomotives
and so on requires a long time and should be tied in in a complex manner to plans
for development of other sectors of the national economy. Future plans should pro-
vide introduction of the latest advances of science and technology.
The tasks in the total volume of shipments in tons, freight traffic turnover and
passenger traffic turnover, the dimensions of capital investments with allocation
of the most important titles or objects of construction, the growth of labor pro-
ductivity and reduction of the cost of shipments, the use of rolling stock and the
task for profits are established in the future plans c~f railway transport. The
indicators confirmed in the five-yeaX plans are distributed by years.
The annual plans of railway transport should provide fulfillment of future plans.
At the same time they are worked out with regard to a specifically developing situ-
ation for operation of transport during the planning year. Annual plans include
more developed nomenclature of indicators than future plans and encompass all as-
pects of the activity of railway transport. The indicators of the annual plan are
established for the year with distribution by quarters.
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Not all indicators of the annual plan are confirmed by the superior organization.
Part of them are calculated and serve to determine the main operating indicators
o� the railroads. Thus, the most important qualitative indicator of operating
activity--the productivity of a freight rail car--is confirmed in the plans of the
railroads by the Ministry of Railways. But the trip of a loaded rail car, the
percentage of empty runs, the dynamic load of the rail car and a number of other
indicators must be calculated to determine this indicator.
Operational plans include quarterly plans of shipments with distribution of them
by months and the monthly technical plans (norms of operating wc~rk) of railroads.
The need to develop operating plans is determined by the fact that some changes
occur during fulfillment of the annual plan. For example, the need for shipments
_ may change with regard to overfulfillment of production plans by industrial enter- ,
prises, a high yield of agricultural products and so on.
Qualitative indicators of utilization of rolling stock, operating fleets of rail
cars and locomotives, regulating tasks in transfer of loaded and empty rail cars ,
- by junction stations and other tasks are established by the network as a whole and
- by railroads in technical plans.
Operating tasks calculated for the 10-day and 5-day period, 24 hours or shift are ,
established for some types of work. ~
4.3. Main Sections of the Annual Plan I
The annual plan of railway transport for the network as a whole and by railroads '
is worked out for the following main sections: the plan of freight and passenger
shipments, the operating plan of the railroads, the plan of major overhaul of main
facilities, the plan of capital investments, the plan of planning-research work,
the plan of scientific research w~ork and introduction of the advances of science
and technology, the plan of industrial output, the labor plan, the plan of material -
_ and technical supply and the financial plan (including the balance sheet of income
and expenses).
The plan of freight and passenger shipments is the main, initial section of the
plan. The volumes and directions of shipments are established in it. The necessary
measures to increase the carrying and traffic capacity of the railroads, the re-
quired dimensions and structure of rail car and locomotive fleets and consequently
- the volume of the required capital investments are determined as a function of the _
volume of shipments and also as a function of the capacity of freight traffic vol-
ume and passenger traffic volume by direction.
The number of transport workers, the fuel, electric power and material requirements,
the dimensions of income and expenses of railroads, i.e., indicators of almost all
the remaining sections of the plan, are calculated on the basis af the shipment
plan. ~
Z'he operating plan of railroads includes the operating plan of rolling stock and
the plan of operating expenses. The mileage and required fleets of rail cars and
locomotives are calculated in the first plan on the basis of the given dimensions :
of shipments and indicators of rolling stock utilization. The qualitative indica-
tors of rollinc~ stock utilization are worked out with regard to the use of leading
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methods of labor and introduction ofnew technology and progressive production
processes. The second plan includes wage expenses, social insurance deductions,
fuel expenditures, electric power and material expenditures, depreciation and mis-
cellaneous expenses and also indicators of the cost of shipments.
The plan for major overY~aul of main facilities provides fulfillment of work to main-
tain locomotives, rail cars, containers ar.d other permanent facilities of railway
transport in a working condition.
Z'he vo lume of work expressed in physical and monetary terms on reconstruction of
objects of railway transport and on new construction and also expenditures to ac-
quire rolling stock, modernization of it and acquisition of spare parts is deter-
mined in the capital investments plan.
The volume of planning-research work on railway transport for the construction of
future years and current construction, carried out both through one's own planning
organizations and through the planning organizations of other ministries and agen-
cies, is established in the plan of planning-research work.
The plan of scientific research work and introduction of the advances of science
and technology provides fulfillment of scientific research and experimental work to
develop and test industrial models of new machines, mechanisms, equipment, devices
and materials.
The plan of industrial output by enterprises of railway transport determines the
volume of gross, commercial and sold products and the variety of them, the task on
repair of rolling stock and production of spare parts, output of individual types
of machines, mechanisms and so on.
The required contingent of workers, the wage level and fund and also the task on
the increase of labor productivity are established in the labor plan.
The plan of material and technical supply determines the need of transport for fuel, -
electric power, materials, spare parts, equip:nent and sources of ineeting this need. '
The financial plan of transport establishes the necessary expenses for providing a
given volume of work and the dimensions of income and profits.
Besides the enumerated sections, the summary annual plan of the railroads includes
the plan on state budget organizations (health, education and training of personnel).
All the main sections of the railroad plan contain indicators both for the railroad
as a whole and for divisions.
Z'he annual plan of railroad divisions consists of approximately the same sections
as the railroad plan. The indicators for major overhaul of rolling stock are not
established for a division since the railroad management is responsible for this
work. State capital investments are also not planned by divisinns since they are
beyond the framework of the division in nature and significance.
4.4. Indicators of Plans Confirmed for the Railroad Network and Its Subdivisions
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. .
i
The following indicators are confirmed in the annual national economic plan for ;
railway transport: ~
freight traffic turnover by the railroad network as a whole (in billions df ;
ton-kilometers); '
passenqer traffic turnover for the railroad network as a whole (in billions ~
of passenger-kilometers); ,
the wage fund of workers and th~ task for an increase of labor productivity; ~
the total volume of capital investments with separation of especially impor-
tant construction projects;
the volume of products sold by the industrial enterprises of transport with ~
separation of individual types of products;
the profit plan for main activity. ~
Moreover, delivery of the most important types of equipment, materials and fu~l to '
transport is provided in the plan of material and technical supply of the national
economy.
The Ministry of Railways confirms the plans for the railroads. Z"he tasks of the
railroads are confirmed by the following indicators of the plans:
by shipments--freight traffic turnover in tariff ton-kilometers and passenger ~
traffic turnovers the total shipment of goods with separation of the most important ;
ones and the cost of 10 reduced t-]an;
by use of rolling stock--the productivity of the locomotive and freight car ~
and turnover of the freight car; i-
by labor--the total wage fund for the main activity and the task for an in-
- crease of labor productivity; '
. b finar~ces--the total sum of profits for the main activity and the total and ~
Y ~
calculated profitability; payments to MPS [Ministry of Railways] and appropriations
from MPS;
by capital investments--the total volume of state cagital investments, includ- i
inq the volume of construction and installation work; introduction of basic funds ,
and production capacities into operation; .
by major overhaul of basic funds--the volume of capital (planned) and average
repair of lxomotives, passenger and freight cars, containers and railroad track; ;
by planning-research work--title lists with indication of the capacity and ,
cost of construction, deadlines for w~orking out the contract design and detail
plans and the technical-economic justification of construction of new and expansion
of existinq facilities;
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by material and technical suPP1Y--the volume of fuel, electric power, mater-
ial, spare parts, equipment and other deliveries.
7.'he railroads w~ork out the remaining indicators of the plans themselves and utilize
them as calculating indicators.
The railroad management confirms the plans �or the most important indicators for
the divisions of railroads. The divisions in turn confirm the plans for line enter-
prises by the nucnber of general indicators and indicators differentiated with regard
to the specifics of operation of these enterprises.* M~oreover, monthly technical
norms of operating work are established by MPS for the railroads and by the manage-
ment of railroads for divisions.
The plan of freight traffic turnover is established by railroads in tariff ton-kil-
ometers and by divisions of railroads in operating ton-kilometers. This is explain-
ed by the fact that it is i.mpossible to establish the work in tariff ton-kilometers
within a railroad division according to the existing system of accounting.**
Operational ton-kilometers somewhat exceed tariff ton-kilometers (by 2-2.5 percent)
~ as a result of using intrarailroad procedures, differences in accounting for oper-
ational and tariff distances in tarminals, the different accounting time and for
other reasons. The percentage of the interruption between tariff and operational
ton-kilometers is taken into ac~ount in the shipments plan mainly for those rail-
roads where the use of intrarailroad procedures is inevitable.
Indicators of the railroad plan are deterntined on the basis of tariff or operation-
al ton-kilometers. Thus, measurements of utilization of rolling stock, fuel con-
sumption, freight traffic turnover by types of traction and rail car and locomotive
fleets are calculated on the basis of operational ton-kilometers, while labor pro-
ductivity, the cost of freight shipments, operating expenses, the dimensions of
income and income rates are calculated by tariff ton-kilometers.
In this regard, the dimensions of operational ton-kilometers are also established
~ in calculating indicators, besides tariff ton-kilometers.
The activity of railroads and divisions is evaluated by the results of fulfillment
of the planned tasks for those indicators which are confirmed by a superior organ-
ization. At the same time, all calculated indicators should be carefully reviewed
when analyzing fulfillment of the plan.
The decisions of the 25th CPSU Congress provide for further improvement of the
system of criteria for evaluating the work of production associations, enterprises
and organizations, based on the need to improve the final results of production,
to increase its efficiency and to improve product quality.
*
. This problem is outlined in detail in the second part of the textbook.
Engineer routes are the primary source to calculate operating ton-kilometers and
the railroad agency is the primary source for calculating tariff ton-kilometers.
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4.5. The Structure of Planning Bodies
The USSR Council of Ministers fulfills the planning manag~nent of the national
economy of the U55R and the councils of ministers of the union repuk,lics fulfill
this role for republics. The central palnning-economic body of the national econ-
omy is the State Planning Committee of the USSR Council of Mi.nisters (Gosplan of
the USSR). It relies in its work on the Gosplans of the union republics and the
planning bodies of the union ministries and agencies.
The following organizations manage planning work in railway transport: the plan-
ning-economic administration and the planning departments of administrations in the
_ Ministry of Railways, the planning-economic departments, planning groups or engin-
eers-economi.sts for planning in services in the railroad administrations, the plan-
ning-technical-economic departme:nts in railroad divisions, engineer-economists for
planning in line enterprises and chief bookkeepers of enterprises or rate setters
in separate line enterprises (Figure 4.1).
1 ~ ; ~oen,~ar CCd i
' MaqOoarorM?+uv.cx~e{~1raMreve r,ar '
I
. ~
~o~n0~uoawwm- Rnaaob+t awQe.~� ~
� �V"a~ ~?oOxMX (4) I
S~?Do~~ ( 3 ynpo0eenuuYAC
xe~e~ner,t ~9oor
MoraaE~~r~r~ra~aKUC~r 0 uy~rdar . . , ~ ,
yr~oa~O~eNUO~re~e~MUr Aqoar , ~
iuarab-~re~r~wxo- ~xox~r ~
~?mrccxw (6. O,e,wiw~wx (7 )
o~Ar~l o~e~e~wlt ~pe0np~au,?x
aG,te,fwa etrpot x~t~tan+~r dbpot :
'
Figure 4.1. Structure of Planninq Hodies of Railway Transport
Key : ~
1. Gosplan of the USSR ~
- 2. Planning-economic administration of MPS
3. Planninq-economic departments of railway administrations ~
4. Planninq departments of main administrations of MPS
5. Planners-economists in management services of railroads
6. Planning-technical-economic departments of railroad divisions
7. Planners-economists in line enterprises of railroads
The Main Freight Administration, which includes the Administration of Shipment
Planning, is involved in problems of operational planning of freight shipments in
I~S. Operational planning of shipments is entrusted to the freight services v~ith ,
shipment planning depar4~snents on the railroads. The monthly operatinq plans of the �
railroads or the monthly technical norms are worked out at the Ministry of Railways
by the main administrations of traffic and locomotive facilities and they are work-
ed out in the railroad administrations by the services of traffic and locomotive
facilities.
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There are planning departmer.ts in the railroad-construction trusts, planning
sectors in railroad-construction offices and engineer-econamists for planning in
construction sections. There are planning-production or planning-technical de-
partments at large plants of MPS (locomotive-rail car repair and machine building
plants) and there are planning groups or engineer-economists for planning at small
plants.
The planninq-economic administration of MPS and the planning departments of admin-
� istrations of MPS manage subordinate planning bodies in the railroad network and
- coordinate their work.
, The conversion of the railroads to new conditions of planning and economic incen-
tives and also rapid technical re-equipping of t~ansport made it necessary to ex-
pand the riqhts of the railroad divisions and line enterprises. A number of
measures was implemented for this purpose on organization-technical strengthening
of the railroad divisions and line enterprises of transport; their rights in the
field of plaruiing were also expanded significantly. The railroad division now car-
- ries out complex planning of the production-economic activity of all enterprises
' within its boundaries, with the exception of enterprises of general railroad sig-
~ nificance. It considers and confirms plans and monitors the course of fulfillment
~ of these plans .
' 4.6. Procedure for Development of Plans
' The planning of the national econemy, including that of transport, is based on fu-
' ture plans with distribution of tasks by years. National economic plans are worked
i out on the basis of plans compiled by the enterprises themselves, construction
projects, ministries and agencies and also by L'ne ur~~~n republics on the basis of
the main trends of the future plan confirmed by the CPSU Central Committee and the
~ USSR Council of Ministers.
i
~ The plan for development of railway transport is compiled in the following procedure.
~
i
' Step 1. The planning-economic administration, with the participation of the plan-
~ ning departments of the railroads and administrations of MPS, works out the preZim-
, inary tasks for the railroads and organizations of NR~S on the basis of control
figures confirmed by the CPSU Central Committee and the USSR Council of Ministers
for railway transport as a whole. The preliminary tasks include the scope of ship-
' ments (freight and passenger traffic turnover), the volume of capital investments,
, putting production capacities into operation, the growth of labor productivity and
reduction of the cost of shipments and also the limits on consumptian of basic
maqerials.
~'he preliminary tasks confirmed by the Ministry of Railways are reported to the
railroads and orgesnizations, which work out the tasks by railroad divisions and
plants. The divisions in turn establish similar tasks for the line enterprises
subordinate to them.
Step 2. The line enterprises, based on the limits received by them, compile their
own draft of the plan. The drafts of the plan are discussed by the collectives of
the enterpris~s, are refined and are then presented to the railroad division. The
division considers the drafts of the plans of enterprises, confirms them and
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presents the summary draft o� the plan for the division as a whole to the railroad
administration. The railroad administration considers the drafts of the plans of
the railroad divisions, confirms them and submits a summary draft of the plan for '
the railroad as a whole to the Ministr1 of Railways. The planning-economic admin-
istration of I~S, with the participation of the main administrations, considers the
drafts of the railroad plans and compiles a summary draft of the plan for railway
transport as a whole, which is sul~anitted to the USSR Council of Ministers and Gos-
~ plan of the USSR after confirmation by the management of the ministry.
~Step 3. Based on confirmation of the plan for railway transport by the government,
the planning-economic admi.nis~ration jointly with representatives of the railroads
and division administrations of MPS works out the plan for the railroads. After
confirmati~n by the Minister of Railways, the plan is reported to the rai~.road ad-
ministrations. The planning-economic departments of the railroads, jointly with
the services and representatives of divisions, work out the plan for the divisions
and after it has been confirmed by the chief of the railroad, report it to the cor-
responding divisions of the railroad. The divisions work out the plan for subord-
inate enterprises. ~
After the plan has been confirmed, superior bodies should check whether the plan
has been delivered to its executors on time and whether the indicators of the plan i
correspond to those tasks which were confirmed.
An integral part of the planninq w~ork is control and analysis of fulfillment of the !
plan. W^.11-organized analytical work makes it possible to prevent the appearance '
of disproportions in the economy of transport or to rapidly eliminate existing dis-
proportions and to determine and mobilize internal reserves to fulfill the plan
and for economical consumption of allocated funds.
In light of the decisions of the 25th CPSU Congress, problems of increas~ng the
operatinq efficiency of each enterprise, of providing continuous growth of labor
porductivity, of reducing cost, increasing profits and profitability and improving '
the use of production funds acquire especially important significance. Therefore,
requirements on control-analytical w~ork increase sharply in all sections of railway
transport.
The developed analyses should be complex and should encompass all the confirmed and ~
most important calculating indices.
The analyses, along with an outline of the factual material on fulfillment of the
plan, should contain proposals directed toward mobilization of available reserves,
increasing the effectiveness of utilization of basic production funds and improving
planning-economic work.
COPYRIGHT: Izdatel'stvo "Transport", 1978 '
- b5~i
CSO: 81l~l~/0359
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CHARACTERISTICS OF THE VOLUME OF SHIPMENTS AND FREIGHT TRAFFIC TURNOVER OF RAILWAY
TRANSPORT OF THE USSR
Moscow EKONOMIIQy I PI,ANIROVANIYE ZI~LEZNODOROZHNOGO TRANSPORTA: EKONOMIKA
; ZI~LEZNODOROZHNOGO TRANSPORTA in Russian Part 1, 1978 signed to press 20 Sep 78
pp 76-78 ~
~ [Excerpt from Chapter 6 from the book "Ekonomika i planirovaniye zheleznodorozh-
~ nogo transporta: ekonomika zheleznodorozhno o tr~ns
; g porta," Izdatel'stvo Trans-
; port, 15,000 copies, 352 pages]
i .
i
i [Excerpt] 6.4. Nonuniformity of Freight Shipments.
~ Freight shipments as a whole are distributed nonuniformly by seasons of the year
~ throughout the railroad network and by individual railroads. The main reasons for
~ this are the seasonality of production of certain types of products and also the
' seasonality of operation of river and maritime transport. For example, grain ship-
j ments are cancentrated in July-November, the maximum sugarbeet shipments are in the -
! fourth quarter of the year, shipments of construction materials are during the
i second and third quarters and so on. Many port railway stations increase loading
several times after the beginning of the navigation season by hauling freight to
~ water transport. -
~
i The nonuniform loading of individual freight as a whole throughout the railroad
~ network is shown in Figure 6.3. The nonuniform loading is even qreater in many
i cases for individual stations and railroads.
I
i Nonuniform shipments by seasons of the year complicate the work of railroads and
~ require creation of the necessary reserves of carrying capacity which are utilized
_i only during months of maximum shipments. To assimilate the required shipments, all
calculations on checking the carrying capacity of individual~sections are construc-
; ted on the basis of the volume of work during the maximum month.
; The planned system of management and socialist distribution of the productive =
forces in the USSR permit a significant easing of nonuniformity of freight ship-
` ments. Therefore, creation of reserves of construction materials at points of
~ their consumption before the beginning of construction work and erection of the
~ required number of warehouses and elevators at the point of state grain purchases
for prolonged storage of it specifically contribute to this. Shipment of fuel,
metallurgical raw material, construction and lumber goc~ds must be intensified -
,i .
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~
_ - - .
x .
~o . . . . �
/9 . ~ '
r~ . . �
� � ~ ' ~
. ~ ~ ~ ;
, ~ . ~
~ w .
. a . ~ . ;
~ p ~ ~ y ;
~
~ ~ yI'` ~
� ~ ~ � � �
~
�
/ ~%V s ~ ~ ~
~ , , .
�
i . ~ . .
. s , ~
~ . ~ . . . ;
_ a - ~ ~ ~
,
~ .
~ . '
~ 1 Am1YY88~~Z~~ ~
. ~lec~yu ~1~
Figure 6.3. Nonuniform Shipments of Freight By Months in Percent of Annual
Shipment: 1--suqarbeetst 2--timber= 3--mine~al-construction j
materials; 4--grain products; 5~-coal ;
. IGey :
1. Months i
I
prior to June-July for easinq the nonuniformity within the year, i.e., before the i
beginning of mass shipments of agricultural products. ~
The ratio of the dimensions of freight shipments during the maximum month to the ~
mean monthly figure for the year is called the coefficient of nonuniformity. Let I
us assume thafi 7,860,000 tons is shipped annually for a section or an average of
7,860,000 ~ 12 = 655,000 tons per month, while the scope of shipments during the I
tnaximum month (September) comprises 850,000 tons. Under these conditions the coef-
ficient of nonuniformity for the given section will be ~
~
K; s~-i;s:---: ~ i
The coefficient of nonuniformity of shipments is always greater than 1. ~
Hesides the nonuniformity of shipments durinq the year, there is nonuniformity of ~ ~
I
shipments by days of the month and periods of the day on the railroads.
Intramonthly nonuniformity is characterized by a lesser scope of freight operations i
during the first days of the month and also during weekends compared to the remain- .
ing days of the week. It is explained primarily by the deficiencies in tY~e work of 1
~ the supply-service bodies (untimely issue of details for shipment of goods), the i
nonrhythmic work of enterprises, stopping of wor:c of individual enterprises on ~
_I
. i
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' FOR OFF[CIAL USE ONLY
i
~
Saturdays, Sundays and holidays. The railroads together with the freiqht shippers
should work out and implement measures to eliminate the decrease of work during
some days of the month. '
~ A reduction of freight work (loading and unloading) at nighttime is typical for
nonuniformity during 24 hours. The transport shops should w~ork round the clock at
' large enterprises to reduce the nonuniform work during the 24 hour period.
! Shipments are nonuniform not only in time but in directions as well. The amount
! of freight shipped in one direction (during the year, quarter or month) is greater
on most sections of the railroad netw~ork than in the other direction (opposite).
; There are usually more trains in this direction.
~ A line with greater scope of freight traffic volume is called a loaded line and' one
i with lesser volume is called an empty line. The ratio of the amount of freight
- I shipped in an empty line (EP~r, to the amount of freight shipped in a loaded line,
f EPqr, is called the coefficient of reversibility. This value is usually less than
one and is determined by the formula
__x=~Pa,p:EP,~. ~
The more nonuniform freight traffic volume by direction, the higher the mileage of
empty rail cars and single runs of locomotives, the higher is the need of sections
for carrying capacity since it is determined due to the dimensions of shipments in
the loaded direction. All this makes the cost of shipments more expensive.
An increase of loading of persistently empty lines with additional freight yields
a high economic effect. These lines specifically are: from the center to the
Donbass, to Arkhangel'sk and the Urals, from the Urals to the Kuzbass and Kara-
ganda, from Leningrad to Vorkuta and the Urals, from Central Asia to Siberia and
so on. It has been established that the cost of shipments of additional freight in
esnpty lines is one-third to one-fourth as much than when shipping in the loaded
line.
The coefficient of nonuniformity of freight shipments comprises approximately 1.15
in time and that of the coefficient of reversibility comprises approximately 0.6
on the average throuqhout the railroad network of the USSR.
COPYRIGHT: Izdatel'stvo "ZYansport", 1978
~
6521
' CSO: 81l~1~/0359
;
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i
I
I
i~
~
1
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MAKING FREIGHT SHIPMENTS MORE EFFICIENT AND Tf~ ECONOMIC EFFECTIVENESS OF SHIPMENTS ;
NbsCOw EKONOMIKA I PLANIROVANIYE ZI~LEZNODOROZHNOGO TRANSPORTA: EKONOMIKA
ZHELEZNODOROZHNOGO TRANSPORTA in Russian Part 1, 1978 signed to press 20 Sep 78 !
pp 79-84
[Excerpt from Chapter 7 from the book "Ekonomika i planirovaniye zheleznodorozhnogo ~
transporta: ekonomika zheleznodorozhnogo transporta," Izdatel'stvo Transport, -
15, 000 copies, 352 pages]
. ~
[Excerpt] 7.1. Characteristics of the Main Types of Inefficient Shipments
Making freight shipments more efficient is a combination of ineasures directed to-
ward improvinq the shipping process and transport-economic relationships. It is
provided by improving planning and organization of shipments and also by feasible
distribution of production and development of national and technical progress. -
Making shipments more efficient is an important reserve for reducing transport ex-
penditures and for increasing the efficiency of social production.
The characteristic feature of making freight shipments more efficient is that it is
accomplished not only within the framew~ork of transport activity but in the field
of material production as well. Making shipments more efficient may be regarded as
necessary and significant only if it leads to a reduction of expenditures in the
national economy as a whole.
A socialist planned economy has at its disposal extensive opportunities to reduce
expenditures, specifically, by eliminating inefficient shipments. A shipment
which causes expenditures for transport, excessive for the national economy, is
regarded as inefficient. Z'hese shipments include counter shipments, cross ship-
ments, excessively long shipments, excessively repeated shipments, split shipments,
circular shipments and those which can be accomplished more feasibly by other types
of transport. Transport of products poorly prepared for shipment is also
' inefficient.
Shipments of goods in a direction counter to the main flow of homogeneous (mutually -
interchanqeable) goods are called counter shipments. ExQlicit counter shipments
when homoqeneous freight is transported in a counter direction by the same section _
of railroad and hidden shipments when these shipments are accomplished on parallel
sections of the railroad or by other types of transport (for example, shipment of
timber by rail counter to the flow of this freight by water) are distinguished.
3~. ~
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Counter shipments of homogeneous goods is one of the most widespread types of in-
efficient shipments.
Excessive freight traffic turnover, caused by inefficient counter sr~ipments EP],~s~,
is equal to the product of double the amount of freight shipped in a counter direc-
tion, Epvstr~ by the distance of the segment of counter direction luch
_ EPlscrv=2EP~crDIY`~' (7.1) �
Of the two counter flows, a lesser flow is inefficient EPvstr� ~ efficient flow
should be directed from a region with a suzplus of given freight to a region with
a shortage of given freight.
Let us assume that 50,000 tons of silicate brick is being shipped on section AB
with length of 300 km (Figure 7.1, a) in direction BA and that 20,000 tons of the
- same brick is being shipped in direction AB. It is obvious that the flow of brick
in direction BA is the mai.~. flow. This means that shipment of 20,000 tons of
brick in direction AB sho uid be regarded as ineffici~nt.
_ . _ _
Q~ 50 muc, t' ~
A 300 ~rw 6
10~rx~C. F + . . � . ~
bl - ~ 3om~rc. r
~ ,300 rr - .6�-
- Figure 7.1. Diagrams of Inefficient (a) and Efficient (b) Shipments
- A scheme of shipment over the same section shown in Fi.gure 7.1, b is efficient. .
As one can see, the counter nature of the shipment wa s eliminated by moving the
shipment of 20,000 tons of silicate brick from direction AB. As a result only
30,000 tons will follow in direction BA. Thus, it is obvious from comparison of ~
the shipment diagrams shown in Fiqure 7.1 that 20,0~0 tons of freight contains -
� twice as much mileage in scheme "a": a total of 50,000 t~ns of flow BA is in flow
AB. The surplus counter freight trasfic volume comprises 2�20,000 tons times 300
km = 12 million t-km.
Crossed shipments are related tc inefficient shipments ~n cases when crossing of
flows of identical freiqht is permitted, which causes excessive mileage of it.
- For example, inefficient shipments are cro3sed shipmer?ts of homogeneous mineral
fertilizers from the Northern Urals to Altayskiy Kray and from Western Siberia to
_ the western regions of Kazakhsta.n and shipments of lumber from the Urals (through
the Sverdlovsk Railroad) to Central Asia and from Siberia to the Donbass. However, -
not all crossed shipments are inefficient. The configuration of the railroad net-
- work is taken into account when determining the inefficiency of these shipmen~s,
comparing specific shipping oistances according to crossed directions.
_ Excessively long shipments are those carried out beyond the distribution zones of
the product and which cause excessive freight traffic turnover. These zones are
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established by the schemes of normal directions of freight traffic volumes. Ex-
cessively long shipments can usually be replaced by shipments for shorter distances.
Different yoods have different maximum shipping distances. For most goods, ship-
ments with a distance of more than 2,000-3,000 lan are regarded as excessively long.
Repeated shipments occur in cases when goods which were hauled to it prior to ship-
ment are sent from a station. Thus, some freight may initially come from an enter-
prise to a base and then from a base to the customers. If it is established that
this shipment is unfeasible from national economic aspects, then it should be re-
lated to excessively repeated shipments. Shipments of a product intended for long
storage at points where elevators and refrigerating units are located, from which
it is transported within a certain time to customers or to processing points, are
not excessively repeated shipments.
~ Shipments which do not provide conditions for routing them are called split ship-
ments. They usually occur in cases when one customer receives freight from several
shippers with the possibility and rationality of attaching it only to one of them.
Circular shipments are regar~ed as those in more extended directions instead of the
shortest directions. But,not all circular shipments are related to inefficient
shipments. Thus, in some cases a circular path is less expensive. Moreover, some ~
circular shipments aze caused by the insufficient carrying capacity of the lines. i
!
The efficiency of rail shipments, which it is more feasible to carry out by other j
types of transport (motor, water and pipeline), is determined by technical and '
economic calculations or previously established spheres of efficient use of vari-
ous types of transport. The most typical inefficient shipments of this type are
short-run shipments. Shipments in rail cars for distances up to 30-50 km or more
~ are regarded as short-run shipments for most freight. These shipments can be
more efficiently accomplished by motor transport. -
Inefficient shipments are also those by rail during the navigation season parallel
to`water routes. It is economically more advantageous to use mixed rail-water :
shipments in some directions. Pumping of petroleum products through pipelines is ;
very efficient compared to shipping them in railroad tank cars.
Inefficient shipcnents also includes transport of products poorly prepared for ship- '
ment (unenriched ores and pit coal, unprocessed raw timber, unpressed scrap metal
and raw cotton, machines with uncompact loading of ~hem and so on). A reduction of ;
the mass of goods shipped by reducing the content of moisture and empty spaces in
them, the use of consolidated loadinq and so on leads to an increase of the load- ,
carrying capacity and volume of rail cars. ~
7.2. Measures to Eliminate Inefficient Shipments
An objective prerequisite for making shipments more efficient in the USSR is social '
responsibility for the means of production and transport. The main economic cri- ~
terion in this case is achieving minimum combined national economic expenditures
for production and shipment.
Elimination of inefficient shipments is achieved by workingout and implementing I
measures to make them more efficient. They can all be divided into two groups:
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measures which do not require capital expenditures and which are usually ac-
complished during the current period. These are primarily measures to improve
planning of supply, service and shipmer~ts;
measures which require significant capital expenditures and which are accom-
plished over a long time period (frequently severa? years). This group includes
measures to improve the distribution of productior. and chanqing of production
processes of existing enterprises.
The same shipment during the current period may be regarded as efficient (for ex-
ample, shipment of unprocessed wood from Siberia to the Ukraine), but when consid-
ered for the long term it may be regarded as inefficient (construction of wood-
working enterprises in the region where timber is procured and lumber is shipped
are feasible).
Elimination of the main mass of inefficient shi.pments is possible only as a result
- of working out and implementation of ineasures of the second group.
Analysis of freight shipment by rail and other types of transport shows that a
significant part of inefficient shipments occurs due to the dispersion of product
distribution by enterprises subordinate to different ministries and agencies. For
this reason counter, split, repeated and excessively long shipments of co~nstruction
materials are permitted tespecially reinf.orced concrete products, brick, crushed
stone, and so on), fuel (pit coal and oil), machines, equipment, forest products _
and other goods. Counter shipments of homogeneous or interchangeable types of
products are also permitted (for example, Donetsk and M~oscow and Pechora and
Kuznetsk c~al, gasoline of different brands, cement and so on). A number of ob-
lasts and economic regions ex~rt and at the same time import a large amount of the
same product and frequently over excessively long distances. All these types of
inefficient shipments can be eliminated without loss to the economic activity of
enterprises by coordinating the delivery plans of differ~nt ministries and agencies
and by organization of interchangeable operations of a homogeneous product.
Further development of routing of shipments, specifically, using the experience of
the Belorussian Railroad, is of important significance for elimination of split
shipments. ,
An important measure to reduce inefficient shipments is to use scheme of normal
directions of freight traffic volumes workec~ out by using computers. The use of
computers for these purposes permits one to process the schemes of normal freight
traffic voliunes for all the main types of goods and to arrange annual correction of
them with regard to current changes in the country's economics.
Regionalization of production and shipments of national economic pr~ducts and es- -
tablishing optimum zones for distribution of the products of individual enterprises
and production associations contributes largely to eliminatian of inefficient ship-
. ments. Correct specialization and cooperation of production and establishment of
efficient long ties between suppliers and customers are of important significance
in this case.
An effective means of making shipments more efficient includes further improvement
of the distribution of the country's productive forces by economic regions. It
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primarily envisions the need for opti.mum distribution of the sources of raw mater-
ial and production and also proper consideration of the transport factor when de-
siqning new and reconstructing existing enterprises. Especially large number of
excessively long shipments is caused by deficiencies in the geographic distribution
of production. Approximately five percent of qoods shipped over a distance of more
than 3,000 km determine 25-30 percent of the freight traffic turnover and more than
half of all the long-range shipments goes to basic goods (pit coal, ferrous metal
and petroleiun, forest and grain products). Counter shipments of reinforced con-
crete products, ferrous metals and other goods are explained by deficiznaies in
specialization of a niunber of products.
Energy- ahd heat-consuming products have been significantly developed in a number
of regions of the country with a limzted local fuel base. This causes a large
number of excessively long shipments of fuel from remote regions, specifically, of
pit coal from Western Siberia to the European USSR. Intensive development of the ,
sectors of the national economy in the rJrals, in Western and Eastern Siberia, in the
Far East and in Kazakhstan will smooth soznewhat the irregularity of production ~
distribution in our country. Construc'cion of the Baikal-Amur Mainline Railroad,
introduction into operation of which will permit the existing and newly constructed
enterprises of Siberia and the Far East to be provided with local raw material, is '
of special significance. A} the same time, there may also be some increase of ;
long-range shipments of such goods as timber, petroleum, coal, construction mater- ~
ials and so on with regard to construction of BAM [Baikal-Amur Mainline Railroad]. ~
The 25th CPSU Congress posed the task of further improving the distribution of the ~
country's productive forces and putting into operation a number of large enter-
prises and industrial complexes, especxally in the eastern regions, during the lOth
Five-Year Plan. The main trends of development of the national economy of the USSR
for 1976-1980 envision "to ensure the increase of oil and gas production, aluminum ,
production, more thar, 90 percent of the increase of coal mining, a~proximately 80 '
' percent of the increase of copper production, 45 percent of the increase of cellu-
lose production and approximately 60 percent of the increase of cardboard produc-
tion planned for the five-year plan in these regions."* Development of large pe-
troleum refining plants in some regions and extensive construction of oil pipelines
will significantly reduce the excessively long shipments of petroleum products by
rail. j
~ Measures to improve the equipment and technoloqy of production and transport--in- '
troduction of new equipment, construction of concentration combines, processing of
timber in timber procurement regions, output of new materials and so on--are of ,
important siqnificance for making shipments more efficient. At the same time,
scientific and technical progress have a different planning effect on making ship- ~
ments more efficient. Thus, coal concentration, which contributes to an increase
of the utilization factor of the carrying capacity of rail cars, leads to an in-
crease of rep~at shipments.
An enormous reserve for making shipments more efficient is hidden in the proper
development of all types of transport, economically justified distribution of
*"Materialy XXV s"yezda KPSS" [Proceedings of the 25th CPSU Congress], Moscow,
Politizdat, 1976, 223 pages. ~
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shipments among them, construction of straightening lines and an increase of the
carrying capacity o� operated railways.
When working out measures to make shipments more efficient, one should take into
account that significant changes will occur in the near future in the structure of
- the country's fuel balance, specifically the specific weight of oil and gas will
increase significantly (up to 70 percent). In this regard tr,e possibilities of
using fuel for generation of electric energy at production points at subsequent
transmission of it by LEP to remote regions are bei.ng expanded. This will make it
possible to do away with delivery of fuel to that point for local thermoelectric
power plants. Specific changes will also occur in the use of forest products (an
increase of processing wood in the eastern regions, extensive utilization of wastes
and spoilage, expansion of the output of plywood, packing cardboard and so on are
envisioned), in production of mineral fertilizers (i.ncreasing thA specific weight
of concentrated and complex fertilizers), construction materials (developn~ent of
new ~~nterprises) 4nd so on. Raising the quality of produced products will also
have a definite effect on making transport-economic ties more efficient.
The feasibility of one or another measure to make shipments more efficient is es-
tablished oia the basis of technical and economic calculations. Proper consideration
of the transport factor is of important significance in this case, i.e., considera-
. tion of expenditures on shipment of goods which are contained in the total cost of
a product at the point of constunption. Thus, the cost of a product at the point of
its consumption due to high transport delays may be so significant with a long
shipping distance that it becomes more feasible to organize production of this
product locally, although its cost will be higher here than that of production in
other regions. Proper consideration of the transport factor also contributes to
optimum distribution of productive forces, efficient concentration of production
and specialization and cooperation of it.
COPYRIGHT: Izdatel'stvo "Transport", 1978
6521
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MAIN INDICATORS OF THE ANNUAL PLAN OF SHIPMENTS BY RAIL AND METHODS OF CAI~CULATING
THEM
Moscow EKONOMIKA I PLANIROVANIYE ZI~LEZNODOROZHNOGO TRANSPORTA: EKONOMIKA ZHELEZ-
NODOROZHNOGO TRANSPORTA in Russian Part 1, 1978.signed to press 20 Sep 78 pp 97-99
[Excerpt from Chapter 9 of the book "Ekonomika i plar.irovaniye zheleznodorozhnogo
' transporta: ekonomika zheleznodorozhnoqo transporta," Izdatel'stvo Transport,
15,OOO,copies, 352 pagesl
(Excerpt] . 9.3. Determining the Scope of Dispatch and Arrival of Individual Goods
Comparison of the road plan of shipments begins with determination of the scope of
dispatch (shignent) of goods. The scope of dispatch is established from produc-
tion plans, supply and turnover of inerchandise. Feasible and possible shipment by
other types of transport is taken into account in this case. Detailed calcula- -
_ tions of the future scope of shipment by rail are made only for main mass goods.
Coal resources for the planned period are determined on the basis of the procluction
plan and the coal export plan from the pits (unshipped residues for the beginninq
of the planned period). Consumption for the mine's own needs, losses dur3ng con-
centration and briquetting, and shipments by other types oiE transport and industrial
sxdings are excluded from this total amoun~ of coal. Consequently, that part of
~ coal which will not be shipped by general-pilrpose railroads is excludad. .At~th.e ~
same time transshipping of coal from river and maritime transport to rail transport .
and shipments o� coal from concentration plants are additionally included in the
volume of shipments if these shipments are available on the qiven railroad. '
, Example. There is a deposit of pit coal in the region of the railroad. Mining of
the coal according to plan comprises 5.6 million tons and export of unshipped coal
residues from the pits comprises 500,000 tons. The coal consumption norm for the
mine's own neecis is established at the rate of 1.5 percent of its production, which
comprises (5,600�1.5):100 = ~4,000 tons. _
The coal concentration plant and thermoelectric power ~lant, connected to the coal
mines by spur tracks of noncommon use, are lxated in the coal production region.
~0
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The plan for concentrating the coal is 2.1 million tons, losses of coal during
concentration and losses of coal during briquetting are five percent, or (2,100�5):
:100 = 105,000 tons. This means that the yield of concentrated coal will be equal
- to 2,100 - 105 = 1,995,000 tons. The concentrated coal is exported to other re-
gions. The need of the lxal electric power plant for coal is 650,000 tons.
Under the given conditions, part of the pit coal not transported over general-
purpose tracks comprises:
Mine's own needs 84,000 tons
_ Transport over spur tracks to concentration 2.1 million tons
plant
- Transport over spur tracks to electric 650,000 tons
power plant
Total 2,834,000 tons -
Consequently, 5.6 million + 500,000 + 1,995,000 - 2,834,000 = 5,261,000 tons of
coal for shipment over general-purpose tracks.
The volume of shipments is determined separately for petroleum products by cr~ide
petroleum and petroleum products. The resources of petroleum and petroleum products
~ are established on the basis of the oil production and refining plan. The unexport-
ed residues are determined in this case. The consumption of petroleum products for
the own needs for the fields and petroleum plants, pumping over local and mainline
~ pipelines and direct water shipments accomplished without the participation of rail-
~ roads are excluded from the total resources. Transfer of petroleum products to the
customers at the point of production and arrival of this freight to the railroads
from water and pipeline transport are also taken into account.
The scope of shipment of coke, pig iron, commercial steel ingots, the products of
rolling mills (rolled steel) and iron and manganese ore is determined by goods of
~ the metallurgical indust.ry. The volume of shipment of forest products is taken in-
to account separately by round timber, lim~ber, ties, prefabricated houses, plywood
and similar woodworking products.
The scope of shipment of cement, brick, stone, crushed stone, gravel, construction
sand, roofing materials, refractory brick, ballast, industrial raw material of
mineral origin and casting sand is determined with respect to mineral construction
materials.
The volume of shipments of most construction products is calculated on the basis
of the production plan arld for some types of construction materials on th'e basis
of the norms of consuQnptlon of the material per million ruk;les of construction and
installation work. During the past few years, an average of 13,000 tons of ship-
ments of mineral construction materials by rail in the USSR have gone to each
million rubles of construction and installation work.
The volume of grain shipments is deterrained on the basis of state procurement
plans and processing the grain into flour and groats by grain products. Grain
41
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deliveries to industry (alcohol,.brewing, oil-pressinq, coznbifeed and others) and ,
also shipm~ents for forage purposes are taken into account. The scope of flour and
groats shipments is determined on the basis of their planned production and dis- ~
txibution by oblasts, krays and republics with deduction of part of the flour and
qroats not subject to shipment.
The scope of arrival of individual goods is established on the basis of fi.he needs
of enterprises of a reqion of attraction for raw material, fuel, materials and
other products to provide a planned scope of production and turnover of inerchandise.
;
9.4. Determining the Reception and Turnover of Goods
One must k~now the volvaae of shipments by import, export and transit to determine
the reception and turnover of goods. ~ ~
Railroads establish the scope of shipment and arrival and import and export of
qoods jointly with the organizations lxated in the sphere of influence of the rail-
road on the basis of transport-economic balances. Existing schemes of normal di- `
rections;of freight traffic volumes and also other data obtained from materials of ~
economic investigation are taken into account in this case. ;
Railroads themselves are unable to determine the volume of transit shipments since
this would require that they know the scape of interrayon exchange on a country-
wide scale and hAve a nucnber of other data which the individual railroad usually
does not have at its disposal. Therefore, the scope of reception and turnover of
goods is established by MPS (based on data of interregional exchange for the basic '
- mass goods and drafts.of plans for import and export of goods by railroads) and
reports them to the railroads. i
Reception and turnover (general and individual types of goods) are detezmined for
each junction point between adjacent railroad points. Reception of goods by the '
junction point of one of the railroads is equal to turnover by an adjacent rail-
road at the same juntion point. . j
i
The plan for reception and turnover of go~ds by junction points is established in ~
tons for the year and in the average number of rail cars per day. '
i
Example. The Eastern Siberian Railroad is supposed to ship 23 million tons of coal i
according to plan. The total need for coal of the sphere of influence of the rail-
road is equal to 13,200,000 tons. Let us assume that 700,000 tons is sent to points ~
lxated east of Petrovskiy Zavod Station {Figure 9.2) according to the plan of ~
interregion3l exchange and the remaining amount of coal, minus the needs of the ;
region of the railroad according to the scheme of normal fr.eight traffic volume,
should b~ sent in the western dir~ct;on through the junction points of Mariinsk
and Mezhdurechensk. ~
Under the given conditions, the scope of turnover in the easterly direction through `
Petrovskiy Zavod Station comprises 700,000 tons, while it will be equal to 23 ~
million minus (13,200,000 + 700,000) = 9.1 million tons in the westerly direction ~
- through junction points Mariinsk and ~iezhdurechensk. ~
Export between these tw~o points should be determined with the calculation that the
shortest distance of shpping the coal to ~he customer is provided. In our example '
,
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~
i
i FOR OFFICIAL USE ONLY
1
I
; t~) ~c~> ~ ' ~~`j
! c2~ ~ . ~ ~
i s,oo ~ y ~ ~ o
. ~~a ~
~ 1~ ~-~re. ~ ~ o`' ~~,g 49~'. .
; (8~ A~
0~ ~qp ~ye~'""r�l~~~3) - . ' ~ . .
, . . ?0~'~ .~ro~~. N~"1"~+c (14) . .
, . (9)~ " ~ ' 19oD Y~~r-9b (iar.~ � .
J ` ,t$) ~ ~~000~ t~N .
~ r..~-cw. t12~ . ~ . , t15)
. ' � _ . 17 ~~~8'.
e-~yMian~ ~?~r I~ra+ !?++a' . * . .
I
; Fxqure 9.2. Diaqram of Coal Shipment Over Eastern Siberian Railroad
. i ~ ~y :
' 1. Mariinsk 11. Tigey
~ 2. Ochinsk 12. Abakon
~ 3. Krasnoyarsk 13. Cheremkhovo
` 4. ZaQZernaya la, Irkutsk
' S. Tayshet Y~. Ulan-Udze
6. Bratsk 16. P. Zavod
~ 7. Ust'-Kut 17. Naushki
' 8. To Western Siberian Railroad 18. Zb Transbaikal Railroad
~
~ 9. Mezhdurechensk 19. Coal loac~inq points
10. Adadym 20. Coal unloading points
~
~
~ three million tons of coal should be sxported through Mezhdurechensk Station and
~ 6.1'-;nillian tons should be exported throuqh Mariinsk Station.
~
The scope of reception and turnover of coal through other railroads and junction
; points is established'in similar fashion.
I
,
~ COPYRIGHT: Izdatel'stvo "Transport", 1978
i' -
I
i
' 6521
( CSO: 81l~J~/0359
~
i
I � ~
~
~
I
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~
~
~ .
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~
~ 1~3
~ FOR OFFICIAL USE ONLY
~ ~ ~ ~
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ECONOMIC AI~,LYSIS OF TI~ QUALITY OF UTYLIZING THE HARDWARE OF RAILROADS
Moscow EKONOMIKA I PLANIRWANIYE ZHEI,EZNODOROZHIdOGO TRANSPORTA~ EKONOMIKA ZHELEZ-
NODOROZHNOGO TRANSPORTA in Russian Part 1, 1978 signed to press 20 Sep 78 pp 135-
154
[Chapter 14 from the book "Ekonomika i pl~nirovaniye zheleznodorozhnogo trans-
porta: ekonomika zheleznodorozhnogo transporta," Izdatel'stvo Transport,
15,000 copies, 352 paqes]
- [Text] 14.1. Characteristics of Economic Analysis of Utilization of Hardware
Nk~en comparing the operational plan and analysis of fulfilling it, economic analy-
sis of a chanqe of one o.r another qualitative indicators of the use of railroad
hardware becomes necessary. Z'his analysis is carried out on the basis of the
general method of the comparative economic effectiveness of the planned measures
(see Chapter 5). operating.expenses (the cost of shipments), capital investments .
and the cost of needed circulatinq funds for goods en route should be determined ~
~
and compared for the operating conditions being compared. ~
The task of economic analysis essentially reduces to establishing the effect of
variation of indicators or. the level of cost of shipments, the extent of capital
investanents and also the time required for delivery and preservation of transported
goods and the length and comfort of a trip for rassengers. Analysis of the�effect
of the quality of using hardware on the financial results of railroad operation
(income, profit and profitability) is of important significance.
The economic effect due to improving the qualitative indicators of operational
w~ork is usually achieved by implementation of various organizational-technical or
reconstructive measures in transport and in the national economy which frequently
require significant expenditures. For example, an increase of the weight and
speed of freight trains in a given direction is frec;uently related to expenditures
for lengthening the station receivinq-dispatchinq tracks, introduction of more
powerful locomotives, laying heavy type rails in. the track and so on. An increase
of the static load of rail cars is acr.ieved by the cost of additional expenditures
in transport of the freight shipper, related to an increase of the idle time of
rail cars, building up their sides (during shipment of sugarbeeta and peat, for
example), packing bulk freight with rollers and so on. A reduction of cost in
shipment of freight in larqe-capacity gondolas requirea additional expenditures to
reinforce the capacity of car dumpers. Special rail cars, operation of which
1~.~
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usually makes transport more expensive than universal rail cars, are needed to in-
crease the preservation of many transported gaods.
When the achieved economic effect is compared to the additional expenditures by
which it is achieved, one must observe the principle of a unified complex national
economic approach to economic analysis of the quality of utilizing the hardware of
railroads. This means that the saving must be coitunensurable with expenditures on
tlze scale of the entire national economy and not only within the li:nits of trans-
port or an individual enterprise.
Improving the quality of operational w~rk can also be achieved by organization-
technical measures that do not require additional expenditures. In this case the
effectiveness of ineasures can be estimated by the extent of the effect (saving)
achieved.
When comparing two operational measures, it is feasible to determine the additional
expenditures ~nd saving for oae of them compared to the other. Implementation of
a new measure will be effective if the saving achieved from it is greater than the
additional expenditures.
Absolute expenditures must be determined for each of them when comparing several -
enterprises. The most effective will be the measure, expenditures on which are
the least. It is sufficient in this case to take into account only those expendi-
tures which vary according to the measures being compared.
Proper economic comparison of different measures permits one to select the most
effective of them and to ensure high quality of operational work when reducing
expenditures of the national economy for shipments.
Example. The average daily mileage will increase and the circulating time of a
rail car will be reduced as a result of reconstructing a railroad line 3,000 km
long. In this case the average rate of movement of the freight will increase from
250 to 283 ]an per day. The annual freight traffic volume on the line is 36.5
million tons and the average calculated price of one ton of transported freight is
200 rubles. A total of 65 million rubles is required to accomplish the reconstruc-
tive measures. By reducing the cost of shipments, the annual operating expenses
of the railroads are reduced by five million rubles. One must determine whether
the planned measures are effective.
If one does not take into account the saving from reducing the cost of circulating
funds for freight en route, the reconstructive measures are ineffective since the
calculated payback period of the additional capital investments (65:5 = 13 years)
is higher than the normative period (10 years). However, this calculation is in-
- sufficient. One must also take into account the economic effect from acceleration
of the circulation of the freight mass, which comprises
200�36,5 10~ 3000 3000
365 ( 250 - 283 28 million r~ables
The reconstructive measures will be effective with regard to the saving from re-
ducing the cost of the freight mass simultaneously en route since the calculated
payback period is less than the normative period [(65 - 28) = 5+ 7.4 years].
- ~5
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t'Vf~ Vl'1'~\.~ALa VJai VI~LI . ,
14.2. Improva.ng the Utilization of the Load Capacity of a Rail Car
The quality of utilizinq the load capcity of rail cars is determined by their
static and dynamic loads.
Static load is characterized by the amount of freight on the average per rail car ;
during loading (dispatch). It is calculated by dividing the number of loaded tons ;
of freight by the number of rail cars delivered for loading.
The dynamic load, unlike static load, shows the average load of the rail car with
regard to its mileage. The dynamic load of loaded and operating rail cars is dis- ;
tinguished. The former is determined by the ratio of net ton-kilometers to rail ,
car-kilometers of loaded rail cars, i.e., only the mileage of the rail cars in the
loaded state is taken into account. The second takes into account the mileage of
- both loaded and empty rail cars. It is detercnined by the ratio of net ton-kilo- ;
meters to the total mileage of the rail cars, i.e., to the sum of loaded and empty
rail car-kilometers. :
The indicator of the dynamic load of a loaded rail car more fully characterizes � !
the utilization of its load capacity co~ared to the indicator of static load. ~
These indicators cannot coincide. If rail cars with greater load are dispatched ~
over longer distances, the dynamic load will exceed the static load and vice versa.
~
The dynamic load of a loaded rail car is always higher than that of an operating ;
rail car. The difference, all things being equal, is less, the lower the percent-
age of empty runs of the rail car. '
;
_ An increase of the static and dynamic loacis of a rail car is one of the most im- i
portant reserves for improving the utilization of its load capacity. The higher
, the load, the fewer rail cars and locoanotives required in the fleets and the lower
the expenses for their maintenance and repair and also for shunting work. Expendi-
tures for maintenance of locomotive and forming-up brigades and for fuel and elec-
tric energy are also reduced. There is also an economy of capital investments '
required for acquisition with regard to reducing the need for rolling stock.
A total of 30-35 percent of operating expenses with electric traction and 26-31 '
percent with diesel traction is related to rail car load under average network op- ;
erating condi~ions. An increase of rail car load by one percent reduces the cost
of shipments by an average of 0.28-0.33 percent throuqhout the network. ~
The economic effect from increasinq the rail car load depends largely on the dis- ~
tance of shipment. Under specific conditions of operation, the savi.ng can be de- 1
ternuned individually by initial-final operations and by operations of maaement :
and reforming of trains with regard to the direction of shipment (loaded or empty). -
Ex~tnple. Determine the saving of operatinq expenses while increasing the static ~
load of a boxcar at the dispatch station from 40 ta 42 tons. The freight travels '
through the sections of the division in the freight direction counter to the flow
of an empty boxcar. The shipping distance within the division is 200 km. I'he ~
expenses per rail car, related to fulfillment of the initial operation, are equal '
to 5.14 rubles, the expense rate per rail car-kilometer of loaded run of rail cars '
is 1.58 kopecks and that of an empty car is 0.78 kopeck.
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The saving of operatinq expenses for each 1,000 tons of freight for the railroad
division comprises :
' for the initial operation
1000 ---1~ 5~~4~6.17 rubles;.
~ 40 42 ) ~
- for operations of movement and reforming of trails
( 1~ 1000 1.b8~0,781~~6,66 rubles.
l t 1
The total sum for all operations is 6.17 + 5.66 = 11.83 rubles.
The savin.g of operating expenses depends not only on the shipping distance and the
absolute scope of increasing the rail car load but also on the initial level of
loading from which this increase occurred. For example, for the same conditions
but with an increase of load from 30 to 32 tons, the saving will be almost twofold
greater and will comprise 20.5 rubles.
The amount of the saving from increasing the load can be calculated on the basis
of the number of car-kilometers saved and the consolidated expense rate related to
this measure. An average of 2.4-3.2 kopecks is saved on each car-kilometer saved.
Example. Determine the saving of operating expenses upon loading of 1,000 tons of
freight by the consolidated method at the station, the average shippiny distance
of which comprised 900 }an. With 40 percent empty run to loaded rail cars and with
an increase of load from 40 to 42 tons, the followinq will be saved
- i~;~ ~ -
r ~ - 4Q 1 1~4~ 1500 car-lan
~ !
The saving of operating expenses with a saving of 2.4 kopecks for each car-kilo-
meter will comprise 2.4�1,500 : 100 = 36 rubles.
If the load is increased from 30 to 32 tons per car upon shipment of 1,000 tons of
a different, lightweight cargo from the station, then under the same conditions
the following will be saved
~
1000�900 1000�900 1.4=262b car-km
C 30 3`l ) .
and the saving of operating expenses will comprise 2.4�2,625 : 100 = 63 rubles.
The sa~?ed rail cars can be used far above-plan shipment with an increase of load.
This will ensure that the station receives additional incom~ according to the estab-
lished calcu2ated prices per ton of shipment and an increase of profits.
Nlpreover, if shipments are paid for by the car rate, the release of caxs will pro-
vide a saving to the freight shipper in tari~f payments. `
~
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~
rva~ vrci~.ana, UJC V1~LY
14.3. Acceleration of Freight Car Circulation
The circulating time of a rail car is one of the most important indicators of its
utiilization. This indicator characterizes the time of the total operating cycle of
the rail car from one dispatch to the next dispatch on the railroad network. How-
ever, not all rail cars complete a total operating cycle (from shipment to shipment
on railroads and on railroad divisions). Therefore, the circulating time of a rail-
. car is defined here as the average expenditure of car-hours or car-days per loaded
and presumably loaded rail car. Division of it into individual components is of
important significance for planni.ng and analysis of fulfillment of the rail car
circulating time. The circulating time of a rail car can be represented by three,
four or five components. Five components characterize the time the rail car is:
in trains on waysides, i.e., in motion;
in trains at i.ntermediate stations;
at service stations with transloading;
at service stations without transloading;
at loading and unloading stations.
All these components are contained in the indicated sequence in the developed
formula for rail car circulation
- O 1 l~ ln. _ ln~ ~o ,`II ~
~ 24 . - !MD + r=`_ ""l ~sD'~' KY t~ lf ~14.1)
. 1 . �r , ~ \ ~s L~ !
where 0~ is the circulating time of the rail car, days, lp is a complete trip of
the rail car or the distance which the rail car covezs during the circulating time,
lan, vt is the average running speed of freight trains, km/hr, vu is the average .
section speed of freight trains, ]an/hr, i,n is the route leg or average distance
covered by the rail car between servicing stations with transshipment, km, I,~ is
_ the rail car leg or the ae;erage distance covered by the rail car between all serv-
icing stations (with and without transloading), km, tPer is the average time a
- transit rail car is at servicing stations with transloading, hr, ttr is the aver- .
age time a transit rail car is at servicing stations without transloading, hr, km
is the coefficient of local work which indicates the ratio of the volume of loading
and unloading of rail cars to total w~ork, i.e., to loading on the network or to the
sum of loading and reception of loaded rail cars on the railroad and division.
For a network km = 2 and for roads and divisions 0< lsm < 2, and tgr is the aver-
age time a car is at loading and unloading stations for one freight operation, hr.
The circulating time of a car is frequently determined by a three-term formula,
which has the followinq form:
24 ~ v~ + L rt t'rz Kw ~rp (14. 2)
r �
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where ttekh is the average time a transit car (with and without transloading) is
at servicing stations, hr.
As can be seen from formulas (14.1) and (14.2), the circulating time depends to a ~
large degree on a complete trip of the rail car, determined by the formulas:
1�-1~P ~ 1 anoP~ (14. 3 )
or
r~p (14.4)
`a ( ~ a n~oD ) ,
where lqr is the loaded weight of a car or the distance which the car travels dur-
ing circulating time in the loaded state, }an, agr is the ratio of empty run of
cars to a loaded run, and a~nc~h is the ratio ~~rempty run of a car to the total
run.
A complete trip nf a car can ~lso be representnd in the fox-m of the sum of loaded
and empty trips.
A loaded trip of a car is direct~.y proportional to the average distance of freigh~
shipments, dependent on the distribution of productive forces in the country and
on the qualit~ of shipment pla.nning. An empty trip characterizes the average dis-
ta:zce which a car covers from the unl~ading point to the loading point. -
~
Complete, loaded and empty trips are the ratio of the total, loadeu and empty car-
' kilometers, respectively, to the operation of the network, road or division in
~ cars. In 1975 a complete trip af a car in the network was increased by more than
4 percent compared to 1970 and comprised 1,480 km, while the ].oad~d trip increased
from 1,014 to 1,056 km. ~
_ The length the rail cars are at intermediate, servicing and freight stations, the
running speeds of trains a:~d the ler.gth of the rail car and route legs also have
~ a significant effect on the circulating time of a c~^. The length of the route leg
depends on the level of routing of shipments from the loading poi nts and the qual-
ity of train forming-up plans. The level of the scope of loading by dispatch -
routing was increased from an average of 39.2 percent throughout the network in
- 1970 to 46.1 percent in 1975. ~
The time a transit car is at servicing stations with transloading characterizes
the avera.ge idle time of transit cars at a single servicing station which are un-
hooked from through trains, i.e., they arrive with trains for reforming. In 1975
this indicator comprised 8.77 hr in the netrvork compared to 8.~6 hr in 1970. ~
The time a transit car is at servicing stations without transloading characterizes
the average time a car is at a single servicing station in transit tr.ains. This
indicator increased from 1.55 to 1.83 hr throughout the network in 1975 compared
to 1970.
The time a transit car is at servicing stations characterizes the mean weighted
time transit cars are loc~ted at these stations with and without transloading.
~9
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?�va~ Vl'~'?\rIAL v~.sa: vi~~.a
In 1975 this indicator was equal to 4.29 hr throughout the network compared to
4.15 hr in 1970.
The time a rail car is at loading and unloading stations characterizes the mea~.~
id~e time of a loc al car per freiqht operat'.on. This time is sometimes det~rmined
on the average per car (idle time of a loc~i car) without respect to a freight
operation. The f irst indicator is usually employed for planning and analysis of
sail car utilization at stations. Its value was equal to 20.78 hr in 1970, but
increased to 22.66 hr in 1975.
The local work coefficient also has a significant effect on the circulating time
of a car on railroads and divisions. Its value is determined by variation of the
ratio of local and transit car traffic volumes on roads and divisions.
Thus, the circulating time of a car depends on many economic and operating factors.
It is closely related to the quality of planning freight shipments and by ::he
methods of organizing operational work, especially to a traffic schedule and the
train forming-up plan, organization of work of servicing stations and maintenance
points and to organization of freight operation at stations and on spur tracks.
Therefor~, the circulating time of a car is the most i.mportant indicator of the
quality of car fleet utilization which encompasses almost all aspects of the oper-
ational and economic work of railroads.
The ratio of individual components of rail car circulation on USSR railroads varied
significantly (Figure 14.1) during the period 1951-1975 with a total reduction by
22 percent (from 7.49 to 5.84 days). The fraction of time en route was increased
_ from 18 to 23 percent, the fraction the car was at servicing stations was reduced
(from 46 to 34 percent) and the fraction of rail car idle time at loading and un-
loading stations was increased from 25 to 34 percent. It should be noted that rail
car circulation increased somewhat during the Ninth Five-Year Plan, but it should '
be reduced during the lOth Five-Year Plan.
~ c1,
7,4! cymdl':-
. d ll9 cymo~r
. s xa a~er~mt
vtr~nucA
?~u ~ex e ~
1WA ~fx INLIl1JX r~4 ~
~x
Na
no:pyaxu u
~
aa:~ ~
, a u ~ x
caiaa~ ~X ~x~~X
-
~ .
18SD m0 " ~6 ) ,~915 tq~
Figure 14.1. Circulating Time of Rail Car With Division By Elements .
[Key on following page]
9
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[Key continu~d from preceding page]
1. Days 4. At loading and unloading stations
2. En route 5. At intermediate stations
3. At servicing stations 6. Year
Acceleration of rail car circulation is characterized by high economic effective-
~ ness since it permits one to provide a maximum increase of the carrying capacity
for each ruble of basic production funds, i.e., it improves the index of fund ~
payment. _
When the rail car circulation is accelerated, the opportunity is provided to per-
form a large volume of work and to accelerate delivery of goods by the rail car
fleet. For example, if the working rail car fleet comprises 2,700 units ori a rail-
road division and the circulation time is two days, then the mean daily work of
the division (dispatch plus reception of loaded rail cars) comprises 2,700~ 2=
= 1,350 rail cars. If the rail car circulation is reduced by 10 percent, i..e., by
0.2 day, the division can dispatch and receive 2,700s1.8 = 1,500 rail cars with the
same rail car fleet. Delivery of goods is also accelerated.
If the mean dynamic load of an operating rail car is equal to 35 tons, the volume
of the freight mass ~imultaneously in shipment is reduced in the division by
2,700�35�0.2 = 18,900 tons. With an average calculated price of one ton of freight
at 200 rubles, the cost of the freight mass is reduced by 200�18,900 = 3078 million ~
rubles.
The total economic effect from acceleration of rail car circulation is expressed by
a saving:
operating expenses of railroads dependent on the volume of shipments;
capital investments in the rail car fleet, and development of its rapair base
_ and in station tracks (with reduction of the rail car idle time at stations);
circulating funds of the national economy for freight en route;
operating expenses of railroads not dependent on the volume of shipments if .
the saved rail cars are utilized for additional shipments.
Moreover, acceleration of rail car circulation contributes to an i.mprovement of
the financial results of railroad operation due to receipt of additional profits
from above-plan shipments.
The saving of operational or reduced expendztures of railroads as a result of ac-
celerating rail car circulation is usually determined as the product of the spe-
cific value o� the corresponding expenditures per car-hour by the number of car-
hours saved.
Expenditures per car-hour can be determined:
by the operating expenses for ren~Jation and repair of rail cars during their '
service life;
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by reduced expenditures with regard to the operating expenses and capital
investments to the rail car fleet; to development of their repair base and to ;
station tracks=
by reduced expenditures with regard not only to current expenses and capital ;
J investments but also with regard to the cost of the freight mass in the rail car, ~
i.e., with regard to cir~ulating funds for �reight en route per car-hour.
The expenditures per car-hour fluctuate from an average of 5.5 to 40 kopecks for ,
all types of rail cars, except constant-temperature cars. These expenditures vary i
in the range of 5.5-30 kopecks without regard to the cost of the freight mass and !
they vary in the range of 5.5-15 kopecks without regard to the cost of the freight ~
mass and of capital investments in station tracks.
The number of car-hours saved per day ~Ente$ is calculated by the formula ~
. _ ~
eE~e.�=Up00s�24, . c~4.5~ '
where Ur is the average operation of the network, railroad or division per day� ~
rail cars and ~ is acceleration of rail car circulation, days.
Example. Determine the economic effect from acceleration of rail car circulation
in the division with averaqe daily dispatch of 1,500 rail cars prior to accelera- ~
tion and reception of 2,500 loaded cars from other divisions. The circulating time ~
of the rail aar is reduced by 0.1 day (from 2.1 to 2 days) due to reduction of idle i
times at the stations. !
The saving of car-hours per day comprises (1.5 + 2.5)103�0.1�24 = 9,600, while the ~
saving of the car fleet is 9.6�103:24 = 400 rail cars. ;
With an expense rate of 5.5 kopecks per car-hour, the annual saving of operating ~
expenses for renovation and repair of rail cars comprises '
- . _ _ . - - . . - - ' -
b,8�9~6�10��366 '
. 1~. �~~193 thous. rubles. ~
~
With an average cost of a rail car of 6,550 rubles, the saving of capital invest-
- ments in the rai7. car fleet will be 6,550�400 = 2.62 million rubles and the saving ;
of capital investments to its repair base (10 percent of the cost of the rail car
� fleet) will be 0.1�2.62�106 = 262,000 rubles.
To ensure normal conditions of shipments per rail car, the station tracks should .
be no less than triple the length of each rail car (an averag e of 16 meters) i.e., ,
3�16 = 48 meters. With the cost of 1]an of station t~acks at i50,000 rubles, the
saving of capital investments in their development cor~:~rises (250�103�48�400):1,000= ;
_ = 4.8 million rubles. ~
;
ThP total saving of capital investments is determined by the sum ~
_ i
261 +~.26Z + 4,80 7,68~ million rub3ies : '
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With the calculated cost of one ton of freight at 200 rubles arid with a dynamic -
load of an operating rail car at 35 tons, the saving from reducing the cost of
the freight mass en route comprises 200�35�400 = 2.8 million rubles.
The saving of reduced expenditures with a normative coefficient of effectivenese
of 0.1 will be equal to:
without regard to the cost of the freight mass
,
- -
iQ3 a1 �768~ ~ 981,4~'~iouar.. i+~t~les .
with regard to its cost �
103 + 0.! (768~ + 28ppj ~ IZ41,1 #lvus~. rrub].es.
The volume of additianal freight traffic turnover ~EP1 carried out by the operating
rail car fleet saved as a result of accelerating circulation annually, in the an-
nual saving of operating expenses ~EneZ not dependent on the scope of shipments are
determined by the formulas
dEPI ~ px"" Ss OA~' ~ _
.~1.~-a~n~ i (14.6)
A3- _ .Q c,., OEP1 ,
~ 10�100 (14.7)
where P~~n is the dynamic laad of a loaded car, tons, S~ is the average daily run
of a rail car, ]an, ~n~ is the number of cars o� the operating fleet saved and cnez
is the part of the cost related to expenses not dependent on the scope of shipment,
kopecks/10 t-km.
For example, if the total cdst of shipments is 2.5 kopecks/10 t-]an, of which 60
percent (1.5 kopecks) goes to dependent expenses and 40 percent (1.0 kopecks) goes -
to independent expenses, then above-plan shipment in the part of operating expenses
is only 1.5 kopecks rather than 2.5 kopecks per 10 t-lan. This means that each ad-
ditional 10 t-km will yield 1 kopeck of saving.
Additional profit ~n from above-plan shipments can be calculated by the formula
- , ~~AO:-Caas) DEP[
10�!00 ' (14.8)
where cdokh is the average income rate from freight shipments by tariff, kopecks/
10 t-lan and cSav is the dependent part of the cost of freight shipments, kopecks/
10 t-]an.
Example. Determine the conditional economic effect from acceleration of rail car
turnover of the operating fleet in a division if the average dynamic load of a
loaded car is equal to 49 tons, the empty run of the car with respect to a loaded
car is 40 percent and the average daily run of the car is 250 km. With the same
initial conditions as in the previous example, we find
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- _ .
~9�ZEO�400�985 ' '
eEPI= ~1+~.~~ -1.~8'biriic~:: t-~',
d~.=~'~~1r~1~28 ~ inill.fo~n"zubles.
. t0� 100 . . ~
With an average income rate according to tariff of 4 kopecks/10 t-l�n and with the
dependent part of the cost at 1.5 kopecks/10 t-]an
en~ ~4'0--1.6~ 1,~8~1M =3~~ ~iill:io.n rubies ~auhually._
10�100 .
- Thus, each rail car of the operating fleet saved will yield 3.2�106:4QQ = 8,000
rubles annual profit, which comprises 8,000:365�24 = 91.3 kopecks per car-hour of
physical rail car.
The additional economic effect from acceleration of rail car circulation related
to making saved rail cars available for above-plan shipments cannot always be com-
pletely realized in practice. Therefore, there are suggestions that this saving
be taken into account, for example, in one-half ineasure.
The expenditures caused by imple~nentation of ineasures to accelerate rail car circu-
lation must be taken into,account in calculations. Thus, if the reduction of rail
- car idle time at the station is achieved by using an additional number of loading-
unloading mechanisms, which results in an increase of expenditures for their
maintenance and depreciation, these expenditures must be deducted from the saving
achieved.
~ 14.4. Reduction of Empty Run of a Freight Car ~
An empty run is related to unproductive operation of rail cars since transport pre-
duction is not created as a result of its fulfillment. The percentage (coefficient)
of empty run is determined by the ratio to loaded run and to the total run of rail
cars. The first indicator is calculated by dividing the car-kilometers of an empty
run by loaded car-kilometers and the second is calculated by dividing empty car-
kilometers by the total car-kilometers of run of loaded and empty cars. The values
of these indicators are very stable over time. During the period 1951-1975, the
coefficient of gnpty run to total run varied in the range of 27-28.7 percent and
the ratio to loaded run varied in the range of 37-41 percent.
The scope of the empty run of rail cars is determined mainly by the distribution of
productive forces over the country's territory, by the nature of the economic ties
between its individual regions and by the quality of regulation of the rail car
fleet.
A reduction of empty run yields a large saving of operating expenses: expenditures
for fuel and electric energy and maintenance of locomotive brigades and shunting
work are reduced. NJ;oreaver, a saving of capital investments in rolling stock is
achieved since the demand for rail cars and locomotives is reduced and accordingly
expenditures for their repair and depreciation are reduced. A reduction o� empty
run for ~ach 1,000 car-kilometers yields a saving of approximately 8 rubles. A _
54 ~
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reduction of e.mpty run of a rail car by one percent under average network condi-
tions reduces the cost of shipments by 0.18-0.20 percent.
Example. Determine the saving of operating expenses on the railroad with reduction
- of empty run of the rail car from 40 to 38 percent, i.e., by 2 percent, with re-
spect to a loaded rail car. With an induction coefficient of 0.18, the cost of
shipments will be reduced by 2�0.18 = 0.36 percent. With an average cost of ship-
ments of 2.5 kopecks/10 t-km, this will yield a saving of 2.5�0.36:100 = 0.009
kopeck/10 t-km. If the average distance of freight shipments within the railroad -
is equal to 500 km, then a saving of operating expenses per million tons of ship-
ped freight will be achieved in the amount
~ � 10� � 600 � 0,009 ~ .4~5 'thous . riib~es .
10 � 100
The percentage of empty run is different for different typES of rail cars. It is
least for boxcars and highest for tank cars. This is explained by the fact that
boxcars are more universal. Many types of freight are shipped in them, whereas,
for example, tank cars are used to ship only several types of liquid freight.
Development of optimum schemes for regulation of empty car traffic volume on the
network and railroads, an increase of the number of double operations with loaded
rail cars at stations and an increase of the load of rail cars in loaded shipping
directions contribute to reduction of the empty run of cars. An effective means is
also to find additional freight for shipment in empty directions, implementation of
measures on enrichment of ores and fuel, dehydration of petroleum, briquetting and
pzessing of lightweight freight and improving the coordination of the operation of
interacting types of transport.
14.5. Increasing the Productivity of Freight Cars
Rail car productivi~y is the most generalizing indicator of the quality of opera-
tior.al work. In the final analysis the demand rail car fleet is dependent on the
value of this indicator. The average daily productivity of a rail car lI~ is char-
acterized by the number of net ton-kilometers per rail car of the operating fleet
per day
.ns~_
~ . . (14.9)
= where EPlgod is the annual freight traffic turnover in net operational ton-kilo-
meters and n~ is the operating fleet of rail cars. ~
The level of rail car productivity depends directly on three main qualitative in-
dicators of its utilization--dynamic load, the coefficient of empty run and the
average daily run. This dependence is expressed by the formulas:
_ _ - -
r _
j],~ par"S ~ (14.10)
l ~ +a~D~
(14.11)
II, _ (1-a~v ~ 'S~:
jt~=p~~ S~ (14.12 )
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~
where P~~ is the dynamic load of the car of the operating fleet, tons, and S~ is '
the average daily run of the car, km. ~
i
The average daily run of a freight car S~ is determined by the ratio of the com-
plete trip to the circulating time of the car or by the ratio of the total car-
kilometers to the operating fleet of cars. The less the circulating time of the ~
car, the greater its average daily run and vice versa. ~
The average daily run of a loaded car can be used to judge the delivery rate of `
' goc~ds. Indicators of the average daily run, circulation, trips and coefficient of ~
empty run of a car are related to each other by the following functions: !
~
~
~
. - I
s~= ~o ~ (14.13) i
O. i
1~
i+a~ _ ;
- S,~ ~ ~p~ , (14.14 ) I
0,
On USSR railroads, the average daily run and productivity of an operating car in- ~
crease constantly. During the period 1951-1975, the average daily run was in- !
creased by more than 70 percent and productivity was increased more than twofold. ~
In 1975 the average daily run of a car decreased somewhat compared to 1970 and I
comprised 248.5 km. ~
. ~
The economic effectiveness of increasing freight car productivity is determined on ~
the basis of complex economic analysis of the effect af all the main qualitative ~
indicators indicated above on it. Car praductivity should be increased by 4.3 ~
percent auring the lOth~Five-Year Plan. ~
14.6. Improving the Use of Passenger Rail Cars i
The use of passenger rail cars is characterized by their productivity, filling i
(population), average daily run and also by the speed of passenger trains and by ~
the circulating time of the rolling stock. j
The productivity of a passenger car is a more generalizing indicator of the quality ~
- of its utilizatioii. It is measured by the number of passenger-kilometers per aver- ;
~
age passenger seat. ~
i
Filling of passenger cars is characterized by the index of inean population of them, !
which is determined by the ratio of passenger-kilometers to the run of cars in i
car-kilometers. Z'he value of this index comprised approximately 32.8 persons per ~
car in all types of passenger communicatians in 1975. An increase of car popula- j
tion should not lead to deterioration of the quality ~f passenger service. Filling ~
cars to the norm is an important reserve for reducing the cost of passenger ship- ~
ments. Under average network conditions, an increase of car population by one ~
percent reduces the cost of passenger shipments by 0.41-0.47 percent. ~ ~
i
~
,
- I
i
56 ~
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The use of passenger cars is determined in time by the index of the average daily
run of the car. Its valu~ depends on the speed of the trains and the duration
_ of their stops at all stations, including at ~~he reserve.
The speed of passenger trains on USSR railroads is increasing continuously. The
average section speed of all passenger trains throughout the network as a whole is -
higher than that of freight trains a:~d compri.ses approximately 50 km/hr. The
maximum speed reaches 120 lan/hr on more than 10,000 ]cm,or the length of the network
and it reaches 160 and 140 km/hr, respectively, on the Njosco~w-Leningrad and Moscow-
Brest lines. The problem of increasing the maximum speed of passenger trains to
200-220 km/hr is being resolved successfully. New electric rolling stock is being
introduced for this purpose, braking equipment is being improved and the upper
structure of the track is being reconstructed. It has been suggested that special
high-speed passenger mainlines be developed. _
The indicator of rolling stock circulation is used instead of car circulation in ~
passenger traffic. It characterizes the time from the moment the rolling stock is
dispatched from the station of registration to the next dispatch from the same sta-
tion. The circulating time of rolling stock, expressed in days, indicates how
much stock is required for daily dispatch of trains of a given direction.
Improving the time indicators of passenger car utilization (average daily run of
- car and circulation of stock) reduces the expenses for their depreciation and rou- -
tine repair and also maintenance of the train personnel and lighting and heating
the rail cars. Reducing the idle time of a passenger car by one car-hr discon- -
, nected from trains yields a saving s~f approximate]:y 36 kopecks, while reducing that
of cars connected in trains yields a saving of approximately 1.44 rubles. Along
with this, the need for passenger cars is reduced and capital investments directed
toward construction of them, and toward development of the repair base and station
tracks, are reduced. The fleet of passenger cars freed upon acceleration of stock
circulation can be used for additional above-plan shipments of passenqers.
14.7. Increase of the Weight and Speed of Freight Trains ~
The weignt of a train is the most important qualitative indicator of locomotive
utilization. A number (approximately 20) of factors affect its value. The main
ones are the tractive power of the locomotive, the train speed, the profile
and capacity of the track, tractive resistance, the length of the station, receiv-
ing-dispatching tracks and so on.
It is very important to select the opti.mum ratio of the weight and speed of a_train.
The essence of this selection is to establish with which combination o~ speed and
weight the mos~ economical utilization of the total capacity of a locomotive with
given traction characteristics is achieved on a line with given technical power to
weight ratio.
In other words, we are talking about the optimum method of intensifying the c~rry-
ing capacity of the line since an increase o� the weight of a train is usually ac-
companied by a decrease of speed and vice versa.
The running speed of a train characterizes the time of running on waysides without
regard to the time for acceleration and slowing of the train. Running speed
~
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includes the entire ru~ing time of the train on waysides with regard to the time
for acceleration and slowing down.
The section speed of trains between servicing stations, besides running on way-
sides, also reflects the stopping of trains at intermediate stations.
The route speed also reflects the stops of transit trains at servicing stations.
The weight and speed of freight trains on USSR railroads is increasing constantly
(Figure 14.2). During the period 1951-1975, the average weight of a train in-
creased by more than 90 percent while section speed increased by 66 percent. In
1975 the average grass weight of a train comprised 2,732 tons while the section
' speed comprised 33.4 km/hr.
An increase of the weight anc: speed of freight trains yields a significant saving:
the carrying capacity of the railroad lines increases, operating expenses decrease,
expenditures of work force (locomotive brigades) decrease and the demand fleet of
locomotives decreases. M~oreover, expenditures for fuel and electric power and also
the shunting work at marshalling yards also decrease with an increase of train
weight. There is economy of the car fleet with an increase of speed and ex_pendi-
` tures on maintenance of it are reduced and the circulation of the freight mass is
accelerated.
TJnder average conditions, the cost of shipments is reduced by 0.15-0.2 percent
with an increase of train weight by one percent. An increase of section speed by
one percent yields a reduction of cost by 0.032-0.067 percent.
...._T. .
_ - -
~l ~ ,.1.
- Q�j �~�'r~ ~ t~,fl
~ri
~ 0~ 1Q9! li,9 �yi,i .
~''r
. ~ryv ~f
� t~__~nr~~^~"~~
' , ~r ;
. ~ ~
`~1~) .
.
~ ~r ` : a~ u~ .
r.w b~f .
Figure 14.2. Increase of Weight and Speed of Trains ~ ~
Key : .
1. Km/hr 4. Running speed
2. Weight of train 5. Years
3. Section speed ~
Fuel and electric power economy is increased with an increase of train weight by
reducing the specific consumption of them, z~educing the number of stops with regard
to reducing the number of trains and consequently reducing accel~rations and slowing
down. Reducing the number of trains with the same density of freight traffic
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volume reduces the need for locomotive brigades and the volume o~ shunting work.
Each percentage of an increase of train weight permits a saving of up to 0.2-0.25
percent of shunting locomotives. with unpaired traffic, an increase of train
weight in the loaded dir~ction reduces a single run of locomotives.
Example. The density of freight traffic volume in the loaded direction comprises
22 million t-km net/]an and 36.5 million t-km gross/km on a section extending 200
}an. The gsoss weight of the train may be increased from 2,730 to 3,000 tons in the
near future, i.e., by approximately 10 percent. Determine the extent to which the
number of trains and the need for train locomotives in the operating fleet will be
reduced and what will be the saving of operatinq expenses.
As a result of increasing train weight, the average daily traffic density (the
number of train pairs) is reduced from (36.5-106)/(365�2,730) = 37 to
(36.5�106)/(365�3,000) = 33 pairs of trains. If the circulating time of a loco-
motive remains unchanged and comprises 12 hours, the need for a fleet of train
locomotives will be reduced from 37 (12:24) = 19 to 33(12:24) = 17, i.e., by two
units. With an average cost a� freight shipments of 2.5 kupecks/10 t-km and an
induction factor of 0.2, the value will be reduced by (0.2 -(0.2/1.1))100 = 1.8
percent and will comprise 2.5�0.982 = 2.455 kopecks/10 t-km.
The saving of operating expenses on the section will be equal to
22�10~�200 (4,600-Z.~b5) i98 't~iou~. 'rubl'IEc.
]0�100 .
Let us assume that, all things being equal, along with an increase o F train weight
the section speed will incr~ase from 33.5 to 35.2 km/hr, i.e., by approximately 5
percent. This will yield a cast reduction by (0.067 -(0.067/1.05))100 = 0.32 per-
cent or by 2.5�0.32:1Q0 = Q.008 kopecks/10 t-km with an induction factor of 0.067.
The additional saving of operating expenses will comprise
. 4.4 10~.0,!{09 _ - .
lO,IOD �~'ous �~nbles.. ~
One should bear in mind that with an increase of tr.ai.n weight as well as their
~ speed, additional expenditures may occur. The nature and extent of these expendi-
tures depend on whether improvement of the considered indicators will be achieved
as a result of which planning measures. If the train weight is increased due to
the use of more powerful locomotives and lengthening of station tracks, additional
capital investments in locomotives and station tracks are required and the operat-
ing expenses for maintenance of them also increase. With an increase of train
weight by using double traction and pushing, the expenditures of locomotive-hours
increase and additional expenses for maintenance ~nd servicing of the second loco-
motives occur. In cases when an increase of train weiqht causes a change of the
weight norm, additional expenses occur at the station of change related to uncoupl-
ing and coupling of rail cars. Moreover, expenditures of car-hours for accumula-
tion of rolling stock at the forming-up station with any method of increasing
train weight. The section speed of a train may increase as a result of using more
powerful locomotives, introduction of automatic block systems and centralized
traffic control and strengthening of the track superstructure.
This means that the additional expenditures must be subtracted froin the saving
achieved or the actual payback period of the additional capital investments must
' S9
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be determined and compared to the normative level to determine the effectiveness
of increasing the weight and speed of trains. ~
14.8. Increasing the Productivity and Averaqe Daily Run of a Locomotive
The use of.~train locomotives in freight zrai~ic is most fully characterized by the
index of the average daily locomotive productivity F1. It is measured by the ~
number of gross ton-kilometers per locomotive on the average per day~
- - _~p~ _ . - -
Fa= ~ ~ (14.15)
where EPlbr is the annual volume of gross ton-kilometers and M1 is the operating
fleet of train lacomotives.
Locomotive productivity is a generalizing indicator in which all aspects of the
quality of utilization are reflected: in power (tractive force), time and by the
degree of w~ork productivity. The dependence of productivity on other indicators
is clearly visible from the following formula:
.
-
F~~Q6~Sa{1-~~ . (14.16)
where Qbr is the average gross weiqht of the train, t, S1 is the average daily run
of train locomotives, km, and ~SP is the coefficient of auxiliary line run of
train locomotives.
The effectiveness of increasing locomotive productivity is determined on the basis
of complex economic analysis of the effect of the main qualitative indicators and
pri.marily of the weight and speed of trains, the average daily ri~.n and the frac-
tion of auxiliary run of locomotives on the increase of productivity. It is plan-
ned to inc.rease locomotive productivity by 6.7 percent in 1976-1980.
The average daily run characterizes the quality of locomotive utilization in time.
It depends on the length of the section of locomotive handling and the method of
servicing it, on the sections speed of trains and the time the locomotives are in ~
the depot. ~
The average daily run of a locomotive can be calculated for individual servicing
sec~ions by dividing double the length of the servicing section by the total cir-
culatinq time of the locomotive. For example, the average daily run for a section
- 200 lan long with total locmotive circulating time of 12 hours will comprise
(2�200�24):12 = 800 km/day.
The locomotive circulating time is added from the time in motion and the idle time
at intermediate and section stations and the stations of the ma.in and circulating
depot. The fraction of useful work of a locomotive during the day comprises an
average of 12-13 hours throughout the network. The averaqe daily run of a locomo-
tive on USSR railroads increased more than twofold during the period 1951-1975
and reached 510 km in 1975.
An increase of the average daily run yields a saving of the locomotive fleet or
permits the existing fleet to carry out a large volume of work. A saving of
capital investments in acquisition of new locomotives is achieved in this case.
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Along with economy of the locomntive fleet, an increase of the average daily run _
of locomotives yields a saving oi operating expenses, the value of which depends
on the factors affecting the average daily run. If the time a locomotive in mo-
. tion is compared to trains on sidings, the same effect is achieved as with an in- �
creas e of running speed. Operating expenses for fuel and electric power and also
to pay thP locomotive brigades and for renovation of locomotives are reduced with
an increase of section spe~d due to reducinq the idle times of locomotives at sta-
tions (with locomotive brigades). The extent of this saving comprises 4-5 rubles
per locomotive-hour.
The extent of the saving of operating expenses per locomotive-hour comprises 0.8-
1 ruble in the case of reducing the idle time the locomotive is in the depot, dur-
ing resting of brigades and ri~ring outfitting (without the locomotive brigade).
Lengt~tiening the servicing sectians yields a large saving since the sgecific weight
of productive work of comotives in traffic increases appreciably.
14.9. Methods of Improving the Utilization of Railroad Hardware
Improving the quality of utilizationof rail rolling stock must be cor~sidered to-
gether with development and utilization of the permanent hardware (devices). It
is very important in this case to ensure technical conformity between the rolling
stock fleet and the carryin~ (handling) capacity of all permanent devi~~es of main-
line and industrial transport (tracks, shunting devices, loading front:s caith ware-
houses and means of inechanization and so on).
The dynamics of the main qualitative indicators of rolling stock utilization of
USSR railroads during 1951-1975 is presented in Table 14.1.
Table 14. Dynamics of Qualitative Indicators of Rolling Stock Utilization
Years
Average circulating time of freight
car, days 7.49 5.59 5.57 5.84
Average time a car is, hr:
in a single freight operation 26.0 20.50 20.78 22.66
at a single servicing station 6.90 3.98 4.15 4.29
Average dynamic load of loaded
car, t/car 18.6 21.4 23.5 24.5
Average daily run of freight car, km 146.4 227.0 255.2 248.5 _
- Flnpty run of car to loaded car,
percent 37.0 39.7 40.4 40.2
Average daily run of locomotive in
loaded traffic, km 245.0 367.2 499.6 510.0
- Average gross weight of freight
train, tons 1,430 2,099 2,574 2,732
- Average speed of freight train, ]an/hr
running 33.8 40.4 46.4 46.6
section 20.1 28.3 33.5 33.4
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The task of further increasing the operating efficiency of transport is faced dur- ~
ing the lOth Five-Year Plan. To do this, it is planned to implement a number of
measures to iaq~rove the utilization of transport facilities, to reduce the idle
timzs of rail cars, more complete utilization of their load-carrying capacity and
volume and to reduce empty runs. Interaction of various types of tran.sport will be
improved, the level of complex mechanization of loading-unloading operations will
be increased and the volume of freight shipments in specialized rolling stock and
containers will be increased.
Among the measures directed toward reducing the idle time of freight cars and ac-
celeration of the circulation should be noted: ,
intensification of technical equipping of stations and improvement of their
operating technology;
improving the quality of regulation and traffic control management of trains .
and locomotives;
further concentration of freight and shunting work with cars;
increasing the level of dispatcher routing and also wider use of combined ~
routes of loaded and empty cars; !
~
increasing the section speed of trains. I
Further reconstruction of the car fleet, as a result of which the specific weight
of large-capacity cars wil~ increase, efficient distribution of cars for loading
nccording to the type of freight, the use of leading methods of consolidated load-
ing of cars and reduction of the empty run of cars on t~.he basis of development and
introduction of optimum schemes of regulation will cont~ribute to ar, increase of the _
static and dynamic load of a car.
A significant increase of train weight will be provided by increasing the power of
locomotives and strengthening the track superstructure, extending receiving-dispatch
~ tracks at stations, expansion of the use of eight-axle gondolas and tank cars which
provide higher linear loads and by introduction of leading methods of driving trains.
The average daily run of a locomotive will be increased by lengthening the servic-
ing sections and reducing the specific weight of unproductive idle times of loco-
motives in the main and circulating depots.
High reliability of all hardware is the guarantee of stable and efficient opera~~~on
of rail transport.
COPYRIGHT: Izdatel'stvo "Transport", 1978
6521
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THE ECONOMIC EFFECTIVENESS OF RECONSTRUCTi'NG TRACTION ON RAILROADS
Moscow EKONOMIKA I PLANIROVANIYE ZHELEZNODOROZHNOGO TRANSPORTA: EKONOMIKA ZHELEZ-
NODOROZHNOGO TRANSPORTA in Russian Part 1, 19T8 siqned to press 20 Sep 78 pp 180-
189
[Chapter 18 from the book "Ekonomika i planirovaniye zheleznodorozhnogo transporta:
ekonomika zheleznodorozhnogo transporta," Izdatel'stvo Transport, 15,000 copies,
' 352 pages ]
_[Text] 18.1. Development of Progressive Types of Traction on Railroads
Introduction of electric and diesel traction on USSR railroads began with Soviet
- power .
It was planned to develop powerful electrified mainlines on the main lines of the
railway network in the first national economic plan--the plan of GOELRO, developed
by the initiative and under the supervision of V. I. Lenin in 1920.
The cot~.ntry's first electrified line, which connected Baku to the oil field at
Apsheron (Baku-Sabunchi-Surakhany), was constructed in 1926. The suburban lines of
the Moscow junction, the most difficult mountain sections of the railroads of the
Transbaikal and the Urals, the Murmansk-Kandalaksha arctic section, the Zaporozh`ye-
_ Dolgintsevo line, a number of sections in the Kuzbass and so on were electrified in
subsequent years.
However, the rates of electrificaticn vrPre insufficient until the 20th CPSU Con-
gress. By 1956 there were only 5,400 }an of electrified lines. The Congress de-
_ voted serious attention to the lag of rail transport in the rates of introducing
- new types of traction. According to the general plan for electrification of rail-
roads, confirmed the same year, the Moscow-Kuybyshev-Omsk-Tayshet-Karymskaya-
Petrovskiy Zavod (6,10U km), the Leningrad-Moscow-Khar'kov-Rostov-Tbilisi-Leninakan-
Nordshen (3 , 600 km) , the Moscow-Gor' kiy-Sverdiovsk~Kurgan (2 , 200 ]an) , the Moscow-
Ki.ev-L'vov�Chop (1,300 km) , the Moscow-K,ochetovka-Rostov (1,200 km) and the Novo-
sibirsk-Novokuznetsk-Abakan-Korshunikha (2,000 icm) electrified mainlines having no
equal in length and traffic and carrying capacity appeared in our country.
By the beginninq of 1976, approximately 39,000 km of railroads were electrified.
Electrification remains an important sectiot~of technical re-equipping o.f rail
~ transport during the lOth Five-Year Plan, as before, which permits an increase of
~
~ the carrying and traffic capacity o� the lines within short periods. The USSR '
occupies first place in the world in electrification oE railroads.
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' a va~ v~ ~~v~r~.. v.+.. v..u� ,
Electrification of railroads means not only introduction of electric traction. It ~
is used extensively for mechanization of operations and for organization of public
services and amenities for railroad workers, for electrification of industrial
enterprises, kolkhozes and sovkhozes lxated in the region of railroads. 7."hus,
el,ectrification of railroads under social~sm fs a siynificant contribution to
electrification of the entire country and an important step on the path toward
communism.
~
Construction of the first diesel locomotives was begun in the USSR shortly after
the Great October Socialist Revolution. At the suggestion of V. I. Lenin in 1922,
the Soviet government decided to produce diesel locomotives and ~levelopment of the
world's first diesel locomotive was completed in Leningrad in 1924. However, only
6,500 km of railroads were converted to diesel locomotive traction pri.or to 1956. ~
The rates o� introduction of diesel locomotive traction increased sharply after ~
the 20th CP5U Congress. By the beginning of 1976 the length of lines operated on
- diesel locomotive traction exaeeded 90,000 km. i
. The total length of x~a.i3..ro::ds with electric and diesel locomotive traction now
comprises approximately 130, 000 lan or almc+st 94 percent of the operational length ~
of the railway network. Steam locemotives still remained on some low-active ;
sections.
I
2'he majority of freight and passenger transport is carried out by progressive types I_
of traction (Figure 18.1). Electrified lines, which compri~e 28.1 percent of the
oper.ational length of railroads, carry out more than half of the freight traffic
turnover (Table 18.1). Moreover, more than 60 percent of long-range passenger
~ transport and approximately 80 percent of suburban passenger transport go to them. ~
The remaining part of transport is accomplished mainly by diesel locomotive trac-
tion (Figure 18.2). ;
Steam traction in shunting work is being replaced at rapid rates. In 1975, 88.6 '
percent of shunting work was carried out by diesel locomotives. The conversion of
railway transport to diesel and electric traction will be fully completed during '
the lOth Five-Year Plan.
~Extensive electrification and conversion of railroads to diesel locomotive traction �
are accompanied by constant impr~~vement of the technical and economi~ indicators ~
of locomotives. The main technical and economic indicators of some of the most ,
po`aerful electric and diesel locomotives being operated are presented in Table 18.2.
,
It is planned to organize production of two-section mainline diesel freight loco-
rwtives with rating of 8,000 horsepower, of passenger diesel locomotives with sec- '
tion rating of 6,000 hp and of shunting-removal diesel locomotives with rating of
2,000 hp during the lOth Five-Year Plan. It is also planned to organize production
of mainline electric freiqht locomotives with ratinq of more than 10,000 hp.
18.2. The Efficiency of Electric and Diesel Locomotive Traction
One of the determining technical and eoonomic advantages of electric and diesel
locomotive traction is the high efficiency. As is known, this coefficient is the
ratio of usefully utilized energy to all expended energy. Useful work is measured
on the hook of the locomotive.
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. - ,
rr � .
1M , . ~ ~JS ~
AO ~ �
~ 2
. . 9 I
. 1'
. ~ ~i,
' ~ � ~ ~
!0 . 1~i0 3
, :7f ~
. ~ ~ .
~
' yp ~ ~
~ ' u.l,`1
' 30 / y
. . ~1 ~ ~ ~ , ~ .
/ ~
r~n ~so s9sss aaa~c+w~,~~s
. r.?w!~!) '
_ Figure 18.1. Increase of Len~qth of I~ines With Electric and Diesel Locomotive
Traction: 1--total operational length of railroads; 2--length
of lines with electric and diesel traction; 3--length of lines
with diesel traction; 4--length of Electrified lines
Key :
1. Thousand lan
2. Years
, rr _ _ _ . s!t!
aa I
~ i
,~?,s ~
~
. ~o , .I
~o .
so ;
~ y
p ~ i~ ~1
~ J 2
~ ?.2 M,l t
_ /Y 1 ~r ' ~
0 4t � 7 ~
pY0 q~D f~f319~i8 ~;i ~/E
iai~M (t"~ .
Figure 18.2. Specific Weight of Electrified and Diesel Traction in Freight
Traffic Turnaver of Railroads: 1--electric and diesel trac-
tion; 2--electric traction; ~--diesel traction
Key:
l. Years
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V cp/ce.
If construction of a new straightening line requires capital investments K2 which
exceed those K1 in development of the existinq route through junction B, the return
of additional capital investments by the second version will be equal to _
K,-K, (22.4)
T�" - ec '
Besides reducing shipping expenses, construction of straiqhtening lines permits ~
acceleration of freight delivery and consequently a reduction of the need of the
national economy for circulating funds for goods "en route." A reduction of the
freight mass "en route" M can be determined by the formula
- ~5 (T+wc,-Ti�T),
(22. 5)
where ~P is the number of goo3s shipped during the year over the new line, million
tons, Tdost is the deLivery time of qoods in the old direction and Tdost is the
delivery time of goods in the new direc~ion.
Knowing the structure and cost of the qoods being shipped, one can calculate the
saving of circulating funds in monetary terms, which will be the result of acceler-
ation of freight de~ivery.
i ~
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Reducing the shipping distar~ce of goods usually reduces the need for rolling stock.
This yields a saving of capital investments in the car and ~ocomotive fleets, which
should also be taken into account.
. ;
A very important indicator of their effectiveness for many new construction pro-
jects is the achieved saving in expenditures on shipments by other types of trans-
port, specifically, motor transport. For example, railroad lines constructed in
regions of development of virgin and idle lands reduced the distance of hauling '
goods by motor transport to railway stations by more than 100 lan in many cases.
Expenditures for construction of these lines are returned within short periods, in-
cluding those due to a saving for motor transport.
The effectiveness of new so-called load-easing lines is expressed primarily in the
fact that they eliminate the need for large capital expenditures for development ~
of the carrying capacity of existing sections. For example, the Novosibirsk-
Leninsk-Kuznetskiy line postponed the need to construct second tracking 216 km
long on the Proyektnaya-Yurga section; the Tselinograd-Kartaly line made it pos-
sible to postpone construction of the second tracking on the Tselinograd-Petropav-
lovsk section 419 km long and so on.
One or several of the indicated types of effect acquires decisive significance as ~
a function of the nature of the new line, but most frequently new construction !
projects permit realization of a saving to one or another degree for all indicators. (
~
Construction of new railroads requires very large capital investments at consider-
able material and labor resources. Depending on the terrain conditions, construc-
tion of 1 km of new line costs 200,000-500,000 rubles and in some regions of the
Arctic it costs 600,000 to 1 million rubles. Up to 200 tons of inetal, approxi-
mately 1,000 m3 of timber and a large amount of other materials are required for
each kilometer of new railroad. The economic effectiveness of constructing a new
line must be universally and carefully justified in each specific case with regard
to this. The effectiveness of all capital investments directed toward deveiopment
of rail transport depends on this to a significant degree since capital investments
in new railroad construction comprise a significant part of them.
22.3. Effectiveness of Constructing Second Tracks
- Construction of second tracks is one of the most radical, but at the same time most _
expensive means of intensifying the carrying and traffic capacity of existing lines.
Stations are usually developed simultaneous?y with laying of second track, traction
equipment is intensified, more improved STsB and communications systems are intro-
duced and the layout and profile of the line are improved. Therefore, the techni-
cal level of the railroad line is increased sharply after construction of double
tracking and operating conditions are fundamentally changed. The carrying capacity
increases 2-5-fold in this case.
_ Double tracking contributes to significant improvement of the qualitative indica- -
tors of operational work. For example, sectir~n speed is increased by an average
of 20-25 percent (there are no train stops on a double-track line for crossing and
only stops of freight trains for passenq~_r trains to overtake them remain). Ac-
cordingly, the number of accelerations and slowinq are reduced, due to which the
running speed of trains also increases.
~
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An increase of section speed accelerates car and locomotive circulation. As a
resul~c the need for rolling stock and for expenditures to acquire it is reduced.
_ At the same time opprating expenses are relatively reduced.
The labor productivity of locomotive brigades is increased and expenditures to main-
tain them are reduced with an increase of section speed and reduction of the number
and also the duration of stops. A reduction of the number of accelerations leads
to reduction of fue~ consumption and a reduction of ~he amount of slowing down and _
- the related brakings reduces the wear of rolling stock and expenditures for repair
of it.
At the same time additional expenditures appear to maintain double tracking to de-
velop stations. However, as indicated by practice and calculations, the cost o�'
shipments on a double-track line is much lower with a large scope of freight traf-
fic tL~snover than on two single-track lines having the same total amount of freight
traffic turnover as a double-track line.
Construction of double tracking requires large capital investments. Expenditures
for construction of double tracking comprise 65-70 percent of the cost of a new
single-track line. The cost of laying double tracking under conditions when ex-
tensive work must be accomplished to develop junctions and stations and to
strengthen the existing main track is especially high. In this case construction -
of one km of double tracking costs more than construction of one km of new single-
track line. In this regara construction of double tracking is usually feasible
in those cases when all other possibilities of increasing the carrying capacity of
an existing single-track line are exhausted.
The length of double-track lines in the USSR increased more than twofold during
the years of Soviet power.
COPYRIGHT: Izdatel'stvo "Transport", 1978
6521
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\ V1r V~ ~'~vL11L1 VVL~ V/ ~L? .
.~I : ~
1~ ~~;I
� (
PLANNING CAPITAL INVESTMENTS AND MAJOR OVERHAUL ~
Moscow EKONOMIKA I PLANIROVANIYE ZHELEZNODOROZHNOGO TRANSPORTA: EKONOMIKA ZHELEZ- ~
NODOROZF~TOGO TRANSPORTA in Russian Part 1, 1978 signed to press 20 Sep 78 pp 217-
225 ~
[Chapter 23 from the book "Ekonomika i planirovaniye zheleznodorozhnogo transporta: ;
ekonomika zheleznodorozhnogo transporta," Izdatel'stvo Transport, 15,000 copies
352 pages] .
[Text] 23.1. Main Problems of Planning Capital Investments
More than three billion rubles are expended annually on development of the material
and technical base of rail transport. Therefore, proper planning df capital in- '
vestments on railroads is of important national ecnnomic significance. ~
Planning capital investments solves a number of important problems. At the modern '
stage they are determined by the Main trends for development of the national econ-
omy of the USSR for 1976-1980 and by the decree of the CPSU Central Committee and ~
the USSR Council of Ministers "On measures for development of rail transport in ~
1976-1980." ~
The main problem of planning cagital investments in rail transport is to provide ,
for the needs of the national economy and the populace for shipments with regard to
creation of the necessary reserves of carryinq and traffic capacity of railroads ;
with minimtan expenditures of funds.
A number of ineasures must be implemented to increase the effectiveness of capital
investments. Complex development of all sectors of rail transp~~rt, a high level ~
of development of technology and bringing the technical equipping of the entire
railroad econ~m~~ ~nto agreement with the operational capabilities of new types of
traction must be ~rovided in planning. Dispersion of funds on numerous construc-
tion projects cannot be peLmi.tted and concAntration of capital investments on the _
most imporr~nt and starting objects must be provided and by doing so the construc- !
tion deadlines must be reduced. Wide intro~uc~ion of industrial methods of con- ;
struction using reinforced conerete structures should be envisioned in the plans. . ~
Excesses in drafts and estimates must be eliminated, planning time must be reduced
and construction by stanc~ard designs must be widely implemented to increase the ;
quality and to reduce the cost of construction. �
~
~
;
i
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Planning of capital investments should also provide complex construction of ob-
jects of production significance and of housing, service enterprises and educa-
tional, cultural and health facilities.
Z'he most important task of the plan of capital investments is to tie it to the
plan of material and technical support. Construction that has begun should be
provided with capital investments and material and labor resources in total coord-
ination with the established volume of work.
23.2. The Content of the Plan of Capital Investments
The plan of capital investments is an integral part of the overall plan of rail
transport. It determines the volume and direction of capital investments. The
basis of this plan is the future plan of freight and passenger shipments.
The plan of capital investments i.ncludes three parts:
the volLUne of capital investments, including construction and installation
work;
i.ntroduction of basic funds ar_d production capacities into operation;
the title pages of objects of capital construction.
Moreover, the plan of capital investments contains technical-economic justifica-
tions, sumn?ary economic indicators on construction projects, calculation of the
effectiveness of capital investments and other materials.
The overall sum of investments in the plan of capital investments and construction-
installation work is distributed to abjects of production significance, objects of
nonproduction significance and planning-re~earch work for a~pnstruction of future
years.
Capital investments in objects of production significance are in turn divided
into two types:
expenditures for modernization of rolling stock and acquisition of spare
parts;
expenditures for capital construction with distribution by sectors of the
economy (electrification and power engineering, tracks, locomotives, rail cars,
traffic, STsB and communications, freight, passengers, material and technical
support and so on).
Expenditures for new rail lines and c~ouble tracking are specially allocated.
Capital investments in objects of nonproduction designation include expenditures
for ::onstruction of housing and public facil:Lties, culture, education, health and
s~ on.
The plan of capital investments is compiled not only for sectors of the economy
' hut for types of work as well (capital construction, construction and installation
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work, acquisition of equipment and inventory and so onj and also by directions
for use of capital investments (new construction, expansion of existing enter-
prises,_reconstruction and technical re-equipping of existing enterprises).
Distribution of the total sum of capital investments by sectors of the economy,
types of work and directions for use is called the structure of the plan~of capital _
investments .
Capital investments directed toward acquisition of equipment, tools and inventory
include expenditures for acquisition of rolling stock, track machines and machinery, ,
containers, spare parts and for modernization of morally obsolescent and physical-
ly worn out equipment.
Capital expenditures on environmental protection and efficient utilization of nat-
ural resources (capital investments of ecological significance) are now allocated
in the total volume of capital investments and construction-installation w~rk.
The cost of facilities turned over for operation and their physical volume or
capacity are indicated in the plan of introducing basic funds and production ca-
= pacities into operatian. For example, putting such construction projects as new
roads, double tracking, electrification of railroads, electric power transmission
lines, development and lengthening of station tracks, equipping lines with the
latest means of STsB and communications into operation is planned in kilometers.
Introduction into operation for industrial enterprises is planned in units of the
product produced by them. The unit nf voltane for housing construction facilities
is square meters of total and living area or the number of apartments; the unit
for educational and health faciliti~s is the number of seats in schools and -
kindergartens, the number ~f beds in hospitals and so on.
The deadlines for putting basic funds into effect should be tied to the deadline
for putting enterprises, structures and buildings into operation and should cor-
respond to the norms for the lengch ~f construction.
The initial dociunent for determining the volume of capital investments and con-
struction-installation work and also putting basic funds and production capacities
into operation is the title list.
The title list contains a list of the construation objects and their character-
istics. The name and location of the construction projects, their design capac-
ity, estimated cost and time of beginning and completion of construction are
indicated in it; data are presented on the volianes of w~rk c~mpleted by the be-
gi.nning of t:he planning year and on introduction of basic funds and production
capacities into operation; the anticipated fulfillment during the year preceeding
the planning year is indicated.
The volume of capital work on the estimated cost with allocation of construction-
installation work and putting into operation by capacity and by basic funds with
indication of the dea3line For introduction is established for the planning year. ~
What technical documentation is available and by whom and when it was confirmed is
indicated for each object.
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The volume of construction and installation work is distributed by the executors
a_nonq organizations of the Ministry of Transport Construction (Mintransstroy), the
construction organizations of MPS and other ministries and agencies. Organiza-
tions of Mintransstroy carry out the greatest volume of construction-installation
work in rail transport. A significant part of the work is completed by construc- �
tion organizations of I~iPS (railroad construction trusts, road-building trusts and
so on) .
The title lists are compiled separately for newly begun and transient construc-
tion projects.
Title lists for newly begun construction projects of production significance with
estimated cost of three million rubles and above are confirmed by the USSR Council
of Ministers upon presentation of Gosplan of the USSR, those for construction pro-
j ects costing from one million to three million rubles are confi~-med by the Min-
ister of Railways or his deputies and those for construction projects costing up
to one million rubles are confirmed by the chiefs of railroads.
Title lists of estimated cost from f ive million rubles and above on transient ob-
jects of production significance are confirmed by the Minister of Railways or his
deputies upon coordination with Gosplan of the USSR, those costing up to five _
million rubles are confirmed by the Minister of Railways or his deputies and those
costing up to one million rubles are confirmed by the chiefs of railroads.
Summarv technical-economic indicators--the estimated cost of construction, the vol-
ume of+gross product output, capacity put into operation, specific capital invest-
ments per ruble of gross product output, the cost of product output, profits,
profitability, payback period and fund return--are calculated from titls lists.
23.3. Order of Developing the Plan of Capital Investments
The plan of capital investments is d eveloped in the following order.
Based on future planned freight and passenger traffic volumes by directions and
sections, the planned scope of train traffic in the loaded direction for the
calculating period is established. ifie demand carrying capacity of the lines,
which is then compared to the available capacity by the beginning of the planning
peris~d, is determined from data on the scope of traffic. The comparison is made
for all the main elements which limi t traffic capacity--sidings, stations, energy
suppty (with electric traction), denot devices and so on.
[
The need to i.ncrease the carrying capacity for each section is determined as a
result of comparison and measures are worked out to develop those elements which
limit it. These measures are the basis for determining the volumes of work and
the total sum of capital investments to intensify the carrying capacity of exist-
ing lines.
Along with measures to increase the carrying and traffic capacity of existing lines
and to develop the network by constructiQn of new railroads, work which contributes
, to an increase of labor productivity and reduction of the cost of shi~ments, pro-
vision of traffic safety and increas ing the quality of shipments, on housing and
cultural-service constructior., impravement of caorking and safety conditions, work
on construction of schools, sanitary-therape~~*.ic institutions and so on is pro-
vided in the plan of capital construction.
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- Selection of ineasures to strengthen the carrying capacity of existing railroads,
variants of newly constructed lines and other facilities is made on the basis of
detailed multivariant technical and economic calculations. The planned task and
estimate confirmed in established orde~: are compile3 for each object included in
the plan.
When planning capital investments for railroads, one proceeds from the basic di-
rections of the technical policy in the area of rail transport as a whole. The
limits of funds aliocated for technical re-equipping of railroads and also the
extent of deliveries of rolling stock, materials of track superstructure and other
hardware are taken into account. Capital i.nvestments in development of the carry- _
ing capacity of the most important lines are planned in centralized procedure to
achieve a hiqh level of technical equipping of mainline railroad diractions.
The applications of enterprises, divisions and railroads for capital investments
are reviewed in superior planning bodies from the viewpoint ~f their conformity to
solution of the main problems.
The need for rolling stock and containers is determined by calculation on the f
basis of the presence of the stocl: of them, the qrowth in the volume of shipments
and variati~n of the qualitative indicators of locomotive, rail car and container
utilization during the planning period. ~
The need for locomotives is calculated separately for freiqht and passenger traf- (
fic, shunting work and for types of traction and series of locomotives. One is
gui3ed in this case by the p~an for electrification of railroads and development
of diesel traction. The scope of deliveries of new locomotives is established
with regard to the part of locomotives that should be under repair and reserve,
while obsolescent and low-powered locomotives will be gradually eliminated from
the inventory.
, The need for new freight cars is calculated by the types of cars on the basis of
the structure of freight traffic turnover, with regard to the seasonality of ship-
ments of individual types of goods.
The scope of deliveries of new passenger cars is determined on the basis of the
planned scope of passenger shipments. The calculation is carried o:~ separately
for first class, second class, baggage and mail cars, dining cars and so on. The
need for cars for multiunit traction, diesel trains, refrigerator trains and cars
and also �or refrigerator cars is established separately.
When determini.ng the need for new cars, it is taken into account that obsole~.:ent
cars not corresponding to the operational requirements of general-purpose rail-
roads should be eliminated from the inventory.
The need for containers of various types is determined the same as for new freight
cars.
The number of locomotives and cars for narrow-gauge railroads is calculated
separately.
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~ _
The need for new heavy track machines--track-layers, snow-removal and sloping ma-
cines and snow blowers--is determined on the basis of future volumes of track work
and ~vork an snow removal.
Expe;?ditures for acquisition of spare parts for locomotives, wheel pairs foz cars
and manufacture of experimental models of rolling stock are also included in the
volume of capital investments for acquisition of rolling stock.
Expenditures for modernization are planned simultaneously with expenditures for
~ acquisition of rolling stock. Expenditures for modernization consist of those for
equipping locomotives and cars with more improved automatzc brakes, roller bearings
and so on. ~
A compulsory condition of high-quality pla nning af capital investments for all
sectors of the economy is reduction of the volume of uncompleted construction.
Therefore, when determin ing introduction of basic funds and production capacities
into operation for transient objects, the size of unc~mpleted construction is
universally analyzed and measures are plann ed to reduce it. It is necessary that
the maximum. possible nur,iber of objects and equipment be put into operation within
the planning period.
- 23.4. Planning of Majo r Overhaul
Major overhaul of railro ad hardware is carried out to maintain it in a functioning -
state throughout the entire service life.
Replacement or compl.ete restoration of individual structural components of objects _
being repaired, for example, replacement or restoration of engine parts and assem-
,blies, replacement of a roof, rafters, window sashes and so on is usually carried
out during general mainter~ance. During general maintenance, tracks are completely
replaced with new rails and wood crossties, the tracks are installed on crushed
- stone or existing crush ed stone ballast is cleaned with supplementation af the sup-
' port and dirty sand bal last is also replac ed and other work is carried out.
- General mainfienance is usually carried once every several years, i.e., its fre-
- c~uency is more th~.n a year and is carried out at the expense of depreciation de-
ductions. The latter consist ot two parts: of deductions for total restoration
of worn-out basic funds (renovation) and their deductions for gen~ral mainL-enance.
- The annual sum of deductions for general maintenance is determined in the follow-
ing manner. Let us assw~ne that the service life of an object of basic funds is -
30 years and the frequency of general maintenance is 6 years. Then four major
overhauls (30 ~ 6- 1) will be carried out during, the entire service life. The
- number of repairs is reduced by one since the last repair prior to writi~g the
object off due to wear is usually not carried out. If the cost of the object com-
= prises, let us say, 100,000 rubles and the cost of one major overhaul is 20,000
rubles, then 20�4 =�30,Od0 rubles will be expended for major overhaul during the
entire service life and an average of 80,000 = 30,000 = 2,700 rubles will be ex-
pended during one year, which con~prises 2.7 percent of the total restoration cost
of the given object. The latter figure is also the norm or the quota of annual
deductions f~r major overhaul.
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The noriii of deductions for major overhaul is established by the types of struc-
tures, devices, rolling stock, equipment and other hardware on the basis of their
service life, intensity of utilization and consideration of the need to replace
, morally obsolescent equipment.
The scope of depreciation deductions depends to a significant degree on the service
life of the object. The annual deductions for complete restoration are reduced and
those for major overhaul increase with an increase of service life. In this regard
it is very important to esta.blish the optimum service life of an object at which a
minimum total of annual deductions for renovation and major overhaul would be
provided.
Service li.ves, the annual norms of deductions for�major overhaul and the cost or
price of a single major overhaul are estar,lished for all the most important types
of basic funds of railroads. Annual deductions for major overhaul of basic produc-
tion funds are included in the operating expenses and consequently in the cost of
- shipments. Expenditures of nonproduction basic funds for major overhaul are not -
included in operatinq expenses. Basic production funds coinprise approximately 90
percent of the total value of the basic funds of railroads.
~ The norm of depreciation deductions for major overhaul compri~es 3.4 percent of
their cost on the whole for all hardware of rail transport, but it fluctuates con- j
siderably for individual types of equipment. Far exampie, the annual norm of I
depreciation for major overhaul comprises 1.2 percent for the roadbed, 5.3 percent ;
for the track superstructure, 6.2-6.7 percent ~or electric locomotives and 9 per- ~
cent for constant-temperature cars.
When the major overhaul plan is compiled, the repair program is determined in
natural and monetary units on the basis of the planned valume of work and the fre-
quency of repairs by the types of hardware and the cost of a singlP repair.
The frequency of major overhaul is es~ablished for each type of hardware and is
planned either in years--for freight and passenger cars, shunting, transfer and
removal locomotives, buildings and so on or in millions of gross tons in all types
of tra�fic--for track repair, or in thousands of locomotive-kilometers of total
run--�or repair of train locomotives. There may also be other measuring units.
For example, major overhaul of rolling stock is carried out:
on the average every 2,160,000 km of run for electric train locomotives,
including every two million km for DC locomotive~ and every 2.3 million km for �
AC locomotives;
on the average every 2,175,000 km of run for diesel train locomotives, in-
cluding every 2,160,000 km for diesel locomotives of series TE 3, 2TE10 and TEP10 ,
and every 1.8 million km for series TEP60;
on the average 10-15 years for shunting, removal and transfer diesel locomo-
tives, including every 10 years for diesel locomotives of series TE1, TE2 and
TGM3 and every 15 years for locomotives of series TEM1, TEM2, ChME3 and M62; .
every 10 years for freight cars--boxcars, flatcars and tank cars, every 7
years for gondolas, every 4 years for oxygen tank cars, every 6 years for sections
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of refrigerator trains and refrigerator cars and every 4 years for all-metal.
� passenger cars.
The normal frequency of major overhaul of track is different for main and station
tracks. They also vary as a function of the type of rails, the type of cross-ties
, and the type of ballast. For example, this norm is 500 million gross tons of
freight carried in all types of traffic for R65 rails for crushed stone and gravel
ballast and 315 million gross tons for R50 rails.
_ The plan and actual volume of major overhaul for railroads and divisions may differ
significantly from that of annual deductions for these purposes. Th~ Ministry of
Railways has the right to redistribute part of the deductions for major overhaul
among the railroads and to use them according to the centralized plan of MPS. Part _
of these funds is used, for example, for work to extend station tracks, to equip
lines with automatic blocking systems and centralized traffic control which yield
the greatest effect when they are accomplished on an entire line.
The plan for major overhaul consists uf the summary plan, title lists and explana-
tory notes. The summary plan is worked out, by the indicators established by sec-
tors of the economy and main types of work. The indicators reflect the physical
volume of work and the cost of it. The title lists are compiled for the important
work on majcr overhaul of basic equipment (repair of track, bridges and so on).
Work for major overhaul of track and repair and modernization of rolling stock oc-
cupy the greatest specific weight in the plan. More than 70 percent of the funds
for major overhaul goes to this type of work.
All objects included in the plan for major overhaul should be provided with the
necessary technical documentation, namely: detailed plans of the repair and cal-
culation of its cost are compiled for complex objects and only calculation is com-
- piled for repair work massive in nature and having standard technique of being
performed. Moreover, drafts of organizing work on major overhaul are compiled for
complex type of repair with ~he estimated cost above 25,000 rubles per object and
also for work related to train traffic. Major overhaul costing less than 2,000
rubles per object is accomplished by the cost schedule of work.
Careful evaluation of the actual status of an object should precede without fail
compilation of the plan for major overhaul since there is a need in some cases for
ahead of schedule major overhaul and in c+ther cases of postponing it, This largely
depends on the operating conditions of the object and the quality of its routine
maintenance.
More than two billion rubles are expended annually for major overhaul of the basic
stock of rail transport. Therefore, correct planning of expenditures for major
overhaul is of important national economic siqnificance.
COPYRIGHT: Izdatel'stvo "Transport", 1978
6521
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N'ux urr,s~~wL w~ v~~LY ,
~
,
LABOR PRUDUCTIVITY IN RAIL TRANSPORT
M~oscow EKONOMIKA I PLANIROVANIYE ZHELEZNODOROZI~TOGO TRANSPORTA: EKONOM24 -24 LEZ-
NODOROZHNOGO TRANSPORTA in Russian Part l,signed to press 20 Sep 78 pp
[Chapter 25 from the book "Ekonomika i planirovaniye zheleznodorozhnogo transporta:
ekonomika zheleznodorozhnogo transporta" :Lzdatel'stvo Transport, 15,000 copies,
352 Pages)
[Text] 25.1. Indicators of Labor Productivity
Labor productivity is the most importar~t indicator of labor efficiency in any sec-
tor of the national economy and at any enterprise. V. I. Lenin especially noted
the :~iqnificance of labor productivity for the victory of the new social ord er.
He indicated that "c apitalism can be finally conquered and will be finally qonquer-
ed by the fact that socialism creates a new, much higher labor productivity."*
Z'he level of labor productivity is determined by the number of products produced
per unit ~ime by a single worker or by labor expenditures for production of a unit
of produc4. The ratio between expenditures of live and materialized labor varies
with regard to scientific and technical progress. In many cases the fraction of
materialized labor expended per unit of product increases but at the same time the
fraction of live labor decreases to a greater extent. Total labor expenditures per
- unit of product are reduced and consequently its cost is reduced. Therefore, when
comparing the indicators of productivity of all social labor, one must take into
account expenditures not only o~ live but of materialized labor as well.
Expenditures of only live labor are practically determined and taken into account
in plans and accounting reports since the methods of determining expenditures of
materialized labor have not been worked out and the available initial materials
are insu��icient. Expenditures of live labor related ta a unit of product are
frequently called labor productivity. But this name is inaccurate. The index of
the effectiveness of live labor is usually called output in the plans and accounts
of railroads and line enterprises, whict~ more correctly determines the content of
this indicator.
Freight and passenger shipments are the product of the main activity of rai lroads.
In this.case output is determined by the number of reduced ton-kilometers per
*V. I. Lenin, "PoJ.noye sobraniye sochineniy",[Complete Worksl, Fifth edition,
Vol 39, p 21.
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worker of the operational continqent per year. The value of this indicator is
established in the plans and accounts for the network, railroads and divisions.
The reduced ton-kilometers for the network as a whole and for railr~ads are found
by adding the freight tariff ton-kilometers and passenger-kilometers and those for
railroads divisions are found by addinq the operating freight tan-kilometers and
passenger-kilometers. Output in reduced ton-kilometers does not yield the correct
concept of the true labor expenditures sinc~ one passenger-km requires labor ex-
penditures 2.5-3-fold higher than one t-lan. Therefore, special coefficients must _
be used in calculations for more correct evaluation of labor expenditures for rail-
roads and divisions.
Output is measured in natural indicators in main line enterprises of transport:
gross ton-kilometers per work at locomotive depots, by the number of rail cars dis-
patched and received at marshalling yards, by the number of dispatched and unloaded
tons at freight stations, by the number of dispatched passengers at passenger sta-
tions, by the number of repaired rail cars or car-kilometers at car depots and so
- on. Only workers related to the operating contingent are taken into calculation
in each line enterprise.
Different indicators are also used to determine the output of workers of individual
occupations. For example, the output of locomotive briqades can be measured by
gross ton-kilometers per worker or by locamotive-kilometers and that of conductor
brigades can be determined by train-kilometers. Where output cannot be measured
by a product in natural expression {for example, in repair work), the cost indicat-
or or indicator of expenditure af man-hours for a specific volume of work is used.
Growth of labor productivity is a law of socialist economics. Output in reduced
ton-kilometers increased more than fourfold during 1951-1975 in rail transport .
(Table 25.1).
~ Table 25.1. Number of Operating Contingent and Growth of Output
Years -
Indicators 1950 ~1955 1960 1965 1970 1975
Operating con�tingent, thousand 1,712 1,980 2,011 1,981 1,997 2,070
persons
Reduced product per worker of op- 403 562 833 1,OR8 1,382 I 1,715
erating contingent, thous. t-lan
Growth of annual output, percent 100 139 207 270 343 426 ~
of 1950
Reduced product ger worker of op- 164 229 356 524 665 827
_ erating contingent per hour of
working time, t-km
rowth of hourly output, percent 100 139 217 320 405 504
of 1950
The main trends of development of the national economy of the USSR for 1976-1980
provide for an increase of labor productivity by 18-20 percent in rail transport.
Output per w~rker of operating contingent will comprise approximately 2,020,000 to
2,060,000 reduced t-]an by the end of the five-year plan.
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,
One should bear in mind that comparison of the annual output of transport workers of
different countries (or of one country but for a number of years) inaccurately re-
flects the real growth of labor productivity. Differences in the length of the
working day are not tak~n into account in this comparison; therefore, it is more
correct to compare indicators of hourly output. Although the expenditure of man-
hours in labor and accounting plans has not been established, the hourly output can .
be determined approximately by di~iding the annual output by the normal working
time per worker per year . ~
Thus, in 1964 the output throughout the railroad network comprised 1,032,000 re-
duced t-km and in 1965 it comprised 1,088,000 reduced t-km. Hence, the annual
output during this period increased by (1,088,000 - 1,032,000) : 1,032,000 x 100 =
= 5.4 percent. But in 1964 the normal woxking time was equal to 2,093 hours and
in 1965 it was equal to 2,077 hours. The hourly output in 1964 comprisec~
1,032�103 : 2,093 = 493 reduced t-km and in 1965 it comprised 1,088�103 : 2,077 =
= 524 reduced t-km. Consequently, the hourly output durinq the same period in-
creased by (524 -493) : 493�100 = 6.3 percent.* The difference between the growth
of annual and hourly output in the given example is explained by a reduction of
the annual normal working time due to establishmen~ of two additional holidays per ,
year (8 Dlarch and 9 May) .
There is the concept of laboriousness along with the concept of output. Laborious- I
ness indicates the expenditure of labor per unit of product or volume of work. ~
This is a value inverse to productivity and output. Thus, if output in ton-kilo- ~
met ers is determined by dividing the reduced product EPlpriv bY the operating con- ~
tingent Chekspl ~
EPl nver ( 2 5 .1)
fjp a - .
Naxaao �
then the laboriousness of one reducec~ ton-kilometer is established by an inverse
ratio
~
, T ~ y.nona . (25.2)
' ~ EPlspu
The indicator of laboriousness is frequently used in rail transpQrt, to determine
the need for the work force. In this case laboriousness is the normal expe:aditure
of work for.r,e. Laboriousness is usually established in man-hours or in man-3ays.
For example, the laboriousness of routine maintenance of locomotives is determined
by the expenditure of man-hours per repair, while the laboriousness of routine _
track maintenance is determined by the number of persons per kilometer of track.
25.2. Methods of Increasing Labor Productivity ~
5c ientific ar:d technical proqress in rail transport and mechanization and automa-
. tion of labor have a decisive effect on the level of output and labor productivity
*
It is assumed in these calculations that the relative value of overtime work oes
not change significantty throughout the years.
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as a whale. Especiallf great opportsnities for increa5ing output are pruvided
upon conversion of railroads to new types of traction--electric and diesel.
The continuous growth of shipments creates favorable conditions for increasing
output in a socialist econ~my. This is explained by the following. Part of the
~perating contingent of railroad workers (the dependent contingent) varies in pro- -
portion to the increase of the volume of sh~.pments. They include locomotive bri-
gades, electric fitters, passenger train conductors, forming-up brigades at
stations, workers for routine repair of rolling stock, engineers-brigade leaders
of passenger tr.ains, workers involved in outfitting locomotives, forming-up trains
and so on. The specific weight of this contingent comprises approximately 30-35
percent throughout the network, 40 percent on roads with hiqh freight trafPic
turnover and approximately 25 percent on roads with low freight traffic turnaver. �
The remaining, greater part of the operating contingent {aporoximately 65-75 per-
cent) hardly depends on the volume of shipments if the sco~e of traff.ic increases
within the limits of existing carryit~g capacity. Therefore, the growth af ship- .
ments must lead to an increase in the level of output. For example, if the scope
of traffic increases by 10 percent, the total number of aperating contingent in-
creases by only 3 percent (70 + 30�1.1 = 103) while output due to an increase of
the scope of traffic alone increases by 6.8 percent (110:103�100 = 1Q6.8).
Actually, the dependent part of the contingent increases somewhat more slowly than
the scope of shipments since the weight of trains and speed increase from year to
year, equipment and so on is improved and this reduces the need for a dependent
cont-ingent of workers.
The level of organization of c~perational work, the degree of inechanization of
labor, automation of control and qualifications of workers have an important effect
on the value o~ output throughout the network and roads. A combination of individ-
ual occupations is effective, for example, combination of the positions of station
duty officer and ticket cashier, the posts of Signal operator and caller of loco- -
motive and train brigades or of electric fitter of the contact network, inspector
of cars ~nd receiver-dispatcher of freight and baggage, of technical clerk and
rail car lister and so o~ on low-activity lines. The combination is permissible
if high quality of main work and the work oerformed by the combined occupation is
provided.
Organization of tY~e socialist competition and dissP~nination of leading methods of
labor is of the most important significance for a continuous growth of output and
labor productivity of railroad workers.
J
An increase of output depends to a significant degree on organization of wages and
also on crPative cooperation of scientific and production workers and a number of
other factors. ~
The majority of the increase of shipments in rail transport from year to year was
developed by an increase of output. During the period 1961-1970 the increase of
shipments was developed by 100 percent due to this factor and by more than 96 per-
cent in 1970-1975. It is planned to develop a 95 ~ercent increase of freight
traffic turnover during the lOth Five-Year Plan by increasing output.
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x
q00 ~
JS0 . ~
~ J00
iso ~
roo . . ' .
~so .
, ~QO w + ~
s
ar~ a~r ~ro ~a a~ a~a ,
il) n�"
Figure 25.1. Growth of Annual Output, Average Monthly Wage and Reduction
of Cost of Shipments During the Period 1950-1975: 1--annual
output in reduced ton-kilometers; 2--average monthly wage,
rublesj 3--cost o� shipments, kopecks/10 t-km ,
Key:
l. Years
Moreover, the structure of freight shipments by types of service (transit, import, ~
export and local service) and the level of technical equipment have an effect on i
output on individual railroads. It fluctuated significantly on railroads with
average network output of 1,714,000 reduced t-km in 1975. For example, output
ccmprised 2,870,000 reduced t-km on the Southern Urals Railroad, 2,506,000 km on ~
the Western Siberian Railroad, 1,273,000 ]an on the Moscow Rai.lroad and 620,000
reduc~~i t-km on the Trans-Caucasian Railroad. Therefore, comparisons be~ween rail-
roads by the value of output must be made with regard to correcting coef�icients.
The level o� output on railroads also depends on the structure of shipments by
types of traffic (freight and passenger). Since labor expenditures per passenger-
kilome~er are greater tl:an per ton-kilometer, then output is higher on railroads
with lower specific weight of passenger traffic, all things being equal. ~
The layout of the railroad also afEects output. The simpler the layout, the higher ~
the output that can be achieved. An vice versa, the presence of a large number of
junc~ions, branches and dead-end lines, freight and marshalling yards and junction
stations considerably complicates the work of the railroad. An additional work
force is required to service them.
The level of output is higher on wide-gauge railroads and lower on narrow-gauge
railroads.
The growth of labor productivity is a decisive condition for increasing the oper-
ating efficiency of rail transport. Specifically, an increase of output signifi-
cantly reduces the cost of shipments. The dependence between output and cost is
shown in Figure 25.1.
COPYRIGHT: Izdatel'stvo "Transport", 1978
6521
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WAGES IN RAIL TRANSPORT
Moscow EKONOMIKA I PLANIROVANIYE ZHELEZNODOROZI~10G0 TRANSPORTA: EKONOMIKA ZHELE2-
NODOROZHNOGO TRANSPORTA in Russian Part l~signed to press 20 Sep 78 pp 246-254
[Chapter 26 from the book "Ekonomika i planirovaniye zheleznodorozhnogo transporta:
ekonomika zheleznodorozhnogo transporta" Izdatel'stvo Transport, 15,000 copies,
352 pages]
[Text] 26.1. The Essence of Wages
The wage of socialist production workers is the fraction in social production
expressed in monetary form. But the fraction of workers in social production is
not limited by wages. Besides wages, the state allocates extensive funds for '
health, education, printing of manuals and other sociocultural measures. These
funds form the social funds of consumption.
The scope of wages is established by the state in planned procedure according to
the number and quality of work of each worker and wit: regard to the real capa il-
ities of the state. The personal incentives of workers are achieved by this in the
results of their labor and the opp rtunity to correctly combine personal interests
of workers with the interests of social production.
Nominal and real wages are distinguished. The nominal wage is characterized by
the number of monetary units received for work. The real wage is determined by
the number of material goods and services which can be acquired with a given nom-
inal wage. The real wage can be increased by increasing the nominal wage or by
reducing the prices for goods and rates for different services. In 1975 ti:~ over-
age wage of a worker of the operating contingent of railroads comprised 148 r~~tles
(without regard to payments from the material incentives fund) and it comprised
159 rubles with regard to these payments. The individual wag~ and social consump-
tion funds per fraction of workers and salaried employees comprised their total ~
incame.
The increase of wages should be in specific conformity to the growth of labor
productivity and the growth of labor productivity should constantly surpass the
growth of wages. Only with this condition is a continuous increase o� social
production and a systematic increase of real wages possible. The rates of growth
of labor productivity and wages are determined by planned calculations. The level
of labor productivity in rail transport increases faster than the wage level (see
Figure 25.1).
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A further incxease of wages was provided by the decisions of the 2Sth CPSU Congress.
The average wage of w~orkers and salaried empl~yees will increase by 16-].8 percent
during the lOth Five-Year Plan and will reach no less than 170 rubles per month in
1980. Payments and taxes to the population from social consumption funds will in-
crease by 28-30 percent. An increase for payment of nighttime labor and an intro-
duction of bonuses to the wage for length of service in regions of the Far East is
anvisioned. Measures are planned to improve workinq conditions.
Part of the pZanned measures has already been implemented. In 1977 the wage of '
more than half the workers of the operating contingent increased (additional pay-
ments for nighttime work, for work on sections with intensive traffic and some
others were increased). As a result the wage of workers of the operating contin-
gent increased by an average of more than 3.7 percent.
Beginning in 1979, a bonus is being introduced for prolonged meritorious service
- of wozkers 2ngaqed in jobs on the main activity of rail transport.
26.2. The Tariff System
The wage in rail transport is regulated by ~ tariff system which includes a tariff
scale, ~ariff rates and tariff-qualification guides (TKS) and also duty rates.
i
A unified tariff scale established in 1971 now exists on the entire railroad net- ~
work. Workers of the majority of the operating contingent are paid by the rates
of this scale.
The tariff scale containing the tariff rates for payment of w~orkers involved in
operational work, in jobs on track maintenance and repair, structures, rolling -
stock and other means of transport has six ranks. The entire contingent paid by
rates of this scale is divided into three groups.
The first group includ~~s workers directly involved in the process of shipments and
which represent the main, leading part of the operating contingent. Workers in-
volved in uncoupling repair of cars and locomotives in the de.pot, workshops and
other similar jobs are allocated to the second group. Work of this job category
is different in nature compared to the first group and the tari�f rates for it are
established approximately 3.5 percent lower. The third group includes machine op-
erators. The labor of these workers is usually standardized with high accuracy
- and the intensity of their labor is higher than that of many workers of other cate-
gories. riachine operators should have comparatively high skills. Therefore, rates
2-8.5 percent higher have been established for their waqe compared to workers of
ttie first group.
The tariff rates established for each group of workers are differentiated by the
working~ eonditions, qualiFication ranks and forms of payment. Differentiation by
working conditions has three varieties. The greater part of workers work under
normal conditions. Workers involved in jobs with heavy and harmful working condi-
tions are related, for example, to inspectors-access workers, train compilers and
so on and workers engaged in especially heavy jobs and jobs with especially harmful
conditions are related to casters of lead-tin alloys, tank car washers-cleaners
and so on. The tariff rates of workers engaged in jobs with heavy and harmful
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working conditions are approximately 12.5 percent higher and those for workers en-
gaged in especially heavy jobs and jobs with especially harmful conditions are 23-
27 percent higher compared to normal working conditions.
The value of tariff rates also depends on the tariff r~nk. The tariff rank is ~
established as a function of the nature of the work and the qualifications of the
worker. The first tariff rank provides the lowest wage rate. The ratio of the
wage rates for each subseguent tariff rank to the rate of the first rank is called
the tariff coefficient.
As a result of ineasures to increase wages implemented in 1971, the value of tariff
coefficients was reduced. The tariff coefficient of rank 6 is now equal to 1.715,
whereas it comprised 1.788-1.897 previously. This indicates that the qap in the
wage of low-paid and hiqh-paid workers was reduced.
When an identical job is performed by piece workers and time workers, the tariff
rates are established somewhat higher for piece workers than for time workers.
This is done because the labor of piece workers is more intensive than that of
workers on a fixed time wage.
Hourly rather than monthly tariff rates are established in the tariff scale.
Payment for labor is made for the number of hours per month actually worked.
Average values of the tariff coefficient and of the t ariff rank are frequently
used in planning calculations.
The ranks of qualified workers and ranks of jobs performed by them are established
by tariff-qualification references. The characteristics of the jobs related to
different ranks are given in these manuals and the requirements placed on the ex-
ecutor for assigning him a specific qualification rank are indica~.ed. Two tariff-
qualification manua.l.s--the unified national economic and special railroad manual--
are used on railroads. The majority of jobs and workers in rail transport have a
tariff r~te set according to a special TKS. The labor of locomotive brigades has
significant features. ~~orkers of these brigades 5hould have varied knowledge in
the field of inechanics, electrical engineeri;?q, heat engineering, organization of
traffic, signalling and so on. The wage of locomotive brigades is paid by special
increased tariff rates.
The tariff rates for locomotive brigades are differentiated by types of traffic--
passenger, freight and shunting work. The tariff rates are also differenti.ated by
the types of trains in passenger and freiqht traffic and by the classes and sec-
tions of stations in shunting work.
The highest tariff rates have been established for workers of locomotive brigadEs
in passenger traffic when working with long-distance trains which travel through a
servicing section at an average running speed of more than 100 km/hr. The tariff
rates are 8-12 percent lower than the maximum rates when working with other long-
distance passenger trains and also wit;1 suburban passenger trains on sections with
dense traffic (morF than 100 pairs of trains of all types per day). The tariff
rates are 19-21 percent below the maximum when working with remaining suburban
trains. Work with passenger trains is more complicated and responsible. The most
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experienced and qualified workers usually perfosm it. Therefore, their wage is
higher.
, Only time payment for labor is used in passenger traffic. A precise operating
schedule of brigades can be constructed within the limits of the established
monthly normal run with rigid train traffic schedule. Therefore, there is no need
to use a piecework wage rate. ~
The maximum rates have been established in freight traffic for payment of heavy
and complex work--work with preassembled and transit freight trains. The tariff
. rates are 5-11 percent lower than the maximum on less com~licated work--work with
transfer and export trains and for pushing. The tariff rates are 11-17 percent be-
low the maximum for payment of work with housekeeping and other trains and work on
individual ~ocomotives. The work of brigades of shunting locomotives on the main
sections of large stations (unclassified and classes 1 and 2) is paid according to
the same rat2s.
_ The labor of locomotive brigades has no qualification ranks since the complex of
jobs and their complexity are approximately identical for each worker of the cor-
responding production group. But the experience of workers and their production
skills are taken into account by assigning a qualification class to engineers. Ad-
ditional payment to enqineers of class 1 comprises 15-25 percent, that for engin-
eers of class 2 comprises 10-20 psrcent and that for engineers of class 3 comprises
5-15 percent of the tariff rate of a time worker. Additional payment of 5-10 per-
cent of the tariff rate of a time worker is paid to assistant engineers having the
right to drive a locomotive.
Official monthly rates have been established to pay managers and engineering and
technical personnel, salaried employees and service personnel. The official rates
of workers depend on the class or group of the enterr~rise of rail transport which
are established as a function of the volume and complexity of work.
Official monthly rates have been established for some categories of time workers
(drivers of transport-harvest machines, freight and baggage handlers, boiler work-
ers and so on).
The tariffs and official rates are supplemented by bonuses and additional payments.
Railroad workers of the Arctic, Far East, Siberia, the Urals and other regions
with severe natural climatic conditions receive an increased wage. Regional coef-
ficients have been established which taken into account the degree of wage increase.
- Thus, the reqional coefficient for Sakhalinskaya Oblast is equal to 1.6, that for
Vorkuta is equal to 1.5, that for Sovetskaya Gavan' is equal to 1.4, that for
Gur'yevskaya Oblast is equal. to 1.2, that for Chelyabinskaya Oblast is equal to
1.15 and so on.
A bonus in percent of the monthly wage has been established for workers engaged in
regions of the Arctic and adjacent locales, besides additional payments according
to the regional coefficient.
26.3. Forms and Systems of Payment Used in Rail Transport
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There are two forms of payment: piecework and time work. Each unit of manufac-
tured product or a specific volume of work performed is paid with the piecework
form. rhe working time (working day, month or hour) is paid with the time form.
Piecework payment is used on those jok~s where labor can be normalized. Time pay-
men~ is used if precise normalization is impossible or if the work performed cannot
be accounted for anc checked.
The forms of payment of individual groups of workers have varieties which are usu-
ally called systems. Use of them should provide the maximum incentives to workers
to increase labor productivity, iinprove product quality and to improve their own
qualif ications .
The following systems of piecework payment are used in rail transport: direct
piecework, piecework-bonus, and pie~e rate-bonus. The most widespread in railroad
operation are piecework-bonus and time-bonus systems.
Workers of locomotive brigades engagec~ in freight traffic with transit and built-up
trains and also with export and transfer trains on sections with high stable volume
of work, workers of complex brigades at large stations, workers engaged in routine
repair of locomotives and so on are paid by the piecework-bonus system.
The labor of workers of locomotive brigades in passenger traffic, in export and
transfer work (on low-activity sections and at junctions) and on shunting locomo-
tives, workers of maintenance s~ations (besides PTO at large stations) and so on
is paid by the time-bonus system. Approximately 55 percent of all workers of the
operational contingent are paid on a time basis.
Wage rates per unit of product or work are established to determine the wage with
the piecework-bonus system of payment (the same as with direct piecework payment).
For example, the wage rate for locomotive brigades has now been established for 1
km of run, that for complex and shunting brigades at stations has been established
for one dispatched train or rail car, that for workers hired at maintenance termin-
als at large stations has been established per formed-up train, a train technically
ready for dispatch and so on.
Wage rates are determined by multiplying the hourly tariff rate by the time norm in
howcs. Thus, if the time norm for repair of the carriaqe of a four-axle car com-
prises 1.5 hours, the rank of work is four, the hourly tariff rate of a machinist,
rank 4(finisher) is 61.6 kopeck~, then the piecew~ork wage rate will be 61.6�1.5 =
= I02 . 4 kopecks .
In some cases wage rates are established by dividing the monthly tariff rate by the
monthly wage norm. The average monthly tariff rate, which is c~lculated by multi-
plying the hourly tariff rate by the average monthly working time norm, is taken.
For example, ifthe average mox~thly tariff rate of an engineer is equal to 201.35
rubles and the monthly wage norm is 5,500 km, then the piecework wage rate will
comprise 20,1 35 5,500 = 3.661 kopecks per kilometer.
- Additional payments for work on holidays, at nighttime and for overtime work are
determined individu ally. Work on holidays is paid for at double rate. Additional
' days off may be offered to the worker instead of additional payment.
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Payment at the rate of 35 perceZt of the tariff rate of a pieceworker (with piece
work payment) or of a time worker (with time payment) is established for each hour
of nighttime work. All workers have this type of additional payment regardless of
how they are paid--by tariff rates or rnonthly rates.
Time workers receive additional payment at the rate of 50 percent for the first two
hours of overtime work and 100 percent of their hourly tariff rate for subsequent
hours. Pieceworkers are paid at the rate of SO percent for the first two hours of
overtime work and 100 percent of the hnurly tariff rate of a time worker of the
corresponding rank for subsequent hours. Thus, if a time worker, rank 4, worked
3 hours overtime, then his daily wage at an hourly tariff rate of 57.6 kopecks and
a 7-hour working day will comprise (7�57.6) + 2(57.6�1.5) + 1(57.6�2) = 6.89 rubles.
Additional payment at the rate of 20-30 percent of the tariff rate or of the offi- :
cial rate of the worker whose post is being filled is authorized with combination
of occupations or duties.
Awarding bonuses is widely distributed in rail transport. Bonuses are an important
type of material incentive and are paid botn with piecework and time payments. The
main problem of awarding bonuses is that of creating the maximum incentives for
each worker as a result of his labor and also as a result of the labor of the col- ;
lective of the bri.gade, shop and enterprise as a whole. Enterprises are given the i
right to develop their own regulations on awarding bonuses and to establish the ,
range of workers awarded bonuses, the size of the bonuses and the indicators for
awarding bonuses.
A bonus is awarded from two sources--the wage f und and the material incentives
fund. The size of this part of the wage fund, which is designated for awarding
bonuses, is determined by the plan according to labor. The size of the material
incentives fund depends on the level of profitability and growth of profits and
is created by deductions from profits according to specially established norms.
Bonuses from the waqe fund are paid to workers and to some engineering and techni-
cal personnel and those from the material incentives fund are ~aid to workers,
salaried employees and engineering and technical personnel.
The following have been established by the typical regulation on awarding bonuses
to rail transport workers, confirmed in 1978:
the main indicators of awarding a bonus which characterize the final results
of production or which have a decisive effect on achieving the results. A bonus is
not paid if the main indicators are not fulfilled;
additional indicators of awarding a bonus, established if necessary along with
the main indicators for stimulating various aspects of labor activity. The amount
of the bonuses is reduced if they are not fulfilled ;
the main conditions of awarding a bonus which contain the most crucial re-
quirements on workers. Bonuses are not paid if the main conditions are not
fulfilled;
additional conditions for awarding a bonus containing less important require-
- ments. The size of the bonuses is reduced if they are not fulfilled.
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T2ie number of indicators for awarding bonuses should be�minimum. The size of the
bonuses is increased for overfulfillment of both the main and additional
indicators.
Regulations on awarding bonuses in which indicators for awarding bonuses are
~ recommended for specific categories of workers, the rational amount nf bonuses and
so on, are worked out by the main sector administrations of MPS in development of
the standard regulation. -
- The workers of rail transport enterprises, pieceworkers and time workers are _
awarded bonuses for individual and collective results of work for fulfillment and
overfulfillment of quantitative and qualitative indicatorsy reducing the periods of
work carried out, good maintenance of hardware, fulfillment and overfulfillment of
estab'lished norms and also assimilation of new norms and saving of materials, fuel
and spare parts.
Bonuses may be awarded to workers only for fulfillment nf the established indicator
or only for overfulfillment of it or for the total of fulfillment and
overfulfillment. _
Bonuses are paid for quantitative indicators provided that the qualitative indi-
catozs have been fulfilled and they are paid for qualitative indicators provided
~ that the quantitative indicators have been fulfilled to create incentives to in-
~ crease quantitative production with high quality.
Bonuses are usually established for workers in percent of the piecework wage or
tariff rate (for the indicator as a whole or for each percent of improving it) and
' they are paid for the results of work during the month. A bonus is distributed
among workers in proportion to the wage of each of them if it is awarded for col- _
i lective work.
The total amount of bonuses received by workers from the wage fund cannot exceed
40 percent of their monthly wage. The size of the bonuses from the material in-
centives fund is unlimited.
; Enqineering and technical personnel and salaried employees directly involved in
production (in shops, on shifts and on sections) are awarded bonuses mainly from
the material incentives fund. The indicators for awardinq bonuses to them may be
~ fulfillment and overfulfillment of the profit and profitability plans, reducing
operating expenses and cost, improving the indicators of rolling stock utilization
and so on. The size of the bonuses is established in percent of the official rate
, for fulfillment of the indicators and for each percent of overfulfillment.
Besides piecework-bonus and time-bonus systems of payment, the piece rate-bonus
system is used in rail transport. The labor of workers in track maintenance is
paid by this system. Wage rates with the piece rate-bonus system are established
for a specific volume of work performed by a brigade of workers rather than per
unit of production.
The essence of the piece rate-bonus system consists in the following with respect
to current track maintenance.
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An operating section of track several kilometers long is assigned to each brigade.
The distance of the track determines the number of workers in the brigade and the
tota 1 piece rate of payment. One proceeds in this case on the established norms
of the consumption of the work force per kilometer of tracl~ and of the wage fund .
The norms of consumption of this fund will be different for different categories
of track. The total mcnthly piece rate is established b.y calculation for each
brigade to which an operating section is assigned.
If the task to improve the condition of the track is fulfilled and the track is
maintained normally, the total monthly piece rate is paid completely and is dis-
tributed among the members of the brigade as a function of the time worked by each
of them and the qualification rank assigned. The number of workers in the brigade
can be less thar~ the calculated number by approximately 15 percent if its members
_ agre e to this. Consequently, the total piece rate is divided in this case among a
lesser number of workers and each of the brigade members receives a larger fraction.
This procedure contributes to an increase of labor productivity.
Sf the volume of work is underfulfilled and the number of workers in the brigade is
les s than the calculated number, ttien the total piece rate is reduced in proportion
to the percentage of underfulfillment of work.
I
A bonus is paid monthly to the brigade for fulfillment of the established tasks to
improve the condition of the track. The size of th~ bonus depends on the evalua-
;;io n ~f the quality of track maintenance. A bonus is not paid with unsatisfactory ,
eva luation of maintenance of at least one kilometer of main or station track or of
one facility.
All monies designated for workers for labor form the wage fund. One-time bonuses
(bonuses for socialist competition, for development of inventions, inno~rative sug-
gestions and so on) are not included in the wage fund, i.e., those not provided by
exi sting systems of payment. Such payments as detached duty, pensions and allow-
anc es for social insurance, allowances and subsidies from the material incentives
fund, surcharges to wages for social insurance and so on are not included in the
wage fund. ~
Planning and accounting for all monetary payments are accomplished separate2.y by
the following types: payment of permanent and temporary workers, one-time bonuses,
mis cellaneous payments and surcharges to wages.
COPYRIGHT: Izdatel'stvo "Transport", 1978
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PLANNING THE OPERATING EXPENSES OF RAILROADS
Moscow EKONOMIKA I PLANIROVANIYE ZHELEZNODOROZHNOGO TRANSPORTA: ~KONOMIKA ZHELEZNO-
DOROZHNOGO TRANSPORTA in Russian Part l~signed to press 20 Sep 78 pp 259-265
[Chapter 28 from the book "Ekonomika i planirovaniye zheleznodorozhnogo transporta:
- ekonomika zheleznodorozhnogo transporta" Izdatel'stvo Transport, 15,000 copies,
352 pages]
[Text] 28.1. Classification of Railroad Expenses. The Nomenclature of Expenses
- Railroad expenditures are divided into capital and current. Capital expenditures -
are those for erection of buildings and structures, acquisition of equipment, roll-
ing stock and other basic stock which participate repeatedly in the production pro-
cess. Current expenditures are related to those for wages, fuel, electric power,
materials and depreciation deductions. All these elements of expenditures are
necessary to provide the production process of the current period. Current expen-
ditures of railroads for shipment of freight, passengers, mail and baggage are
called operating expenses.
With respect to the production process, operating expenses are divided into main
- and general economic.
Main expenses are related directly to the production process, i.e., to shipments.
For example, they include expenses for fuel and electric power for train locomo-
tives, for maintenance of locomotive brigades and so on.
- Main expenses are divided into main expenses specific for individual sectors of
the railroad economy (related to repair of rail cars, locomotives, to maintenance
~ of the station staff and so on) and main expenses general for all sectors of the
' economy. The main expenses common to all sectors of the economy include additional
wages of production personnel (payment for leave, payments for fulfillment of state
and public duties, answering military musters and so cn), deductions for social in-
surance, expenses for safety, detached duty and so on.
General economic expenses are r elated to management of enterprises and servicing of
~he production process. These expenses are divided into general economic without
' expenses for maintenance of management apparatus and expenses on maintenance of
management apparatus. General economic expenses include those on wages of shop
personnel, maintenance of buildings, structures and inventory of general economic
significance, on personnel training and so on.
~
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- According to average network data, main expenses comprise 91 percent of the total
operating expenses (including 10 percent of the main expenses common to all sec-
tors of the economy) and general economic expenses comprise 9 percent.
Depending on the method of relating expenses to the cost of shipments, they are
divided into direct and indirect. ~
Expenses related to output of some single type of product are called direct ex-
penses. They can be completely related to the cost of this type of product. In-
direct expenses are related to output of several types of product. These expenses
are related to a specific type of product after preliminary distribution of them.
A high specific weight of indirect expenses in the total sum is typical for
rai lroads .
The operating expenses of railroads are divided into dependent and conditional-
permanent.
Dependent expenses are those which vary in direct proportion to variation of the
volume of shipments. For example, expenses for maintenance of locomotive brigades ~
vary the same as the volume oE shipments. Expenses for fuel, electric power, re-
pair and shock absorption of rolling stock and so on are the same function of the
~ volume of shipments. '
Conditional- ermanent expenses do not vary or vary little with an increase or de- ~
P I
crease of the volume of shipments. Conditional-permanent expenses include the
greater part of expenses for maintenance and depreciation of permanent equipment.
The operating expenses of railroads are planned and taken into account by a specif-
ic system called the nomenclature of expenses. According to the nomenclature, ex-
penses are accounted for and planned according to the main (operational) and auxil-
iary activity. Current expenditures related to shipments of freight and passengers
are taken into account according to main activity. Current expenditures financed
at the expense of miscellaneous sources are taken into account accordinq to auxili-
ary activity. These are expenditures of inechanized railway divisions for loading-
unloading work, ice plants, fuel depots, materials warehouses, quarries and so on.
All expenses related to main activity are planned and taken into account by facil-
ities: passenger, freight, traffic, locomotive, rail car, track, signalling and
- aommunications, electrification and power engineering and several structures. The
specific weight of expenses of individual facilities is not identical in the total
sum. The structure of the operating expenses of railroads by facilities during
1977 is presented below (in percent):
Passenger 1�2
Freight 2�6 _
TraFfic 6.5
Locomotive 35.3
Rail Car 20.3
Tracks 21.6
Signalling and Communications 4.4
Electrification and Power Engineering 2�4
Civilian Structures 1.3
Expenses of Divisions and Administrations of Railrvads and General 4.4
Railroad
Total 100.0
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~.s can be seen, expenses for locomotive facilities occupy the highest specific
weight. Together with expenses for track, rail car and traffic facilities, they
reach 83.7 percent of the total sum.
The structure of operating expenses by railroad facilities varies in time. I'o~'
example, the fraction of expenses of locomotive facilities comprised 40.5 ~ercent
in 1950. A reduction of it to 35.3 percent occurred due to the effect of technical
reconstruction and also due to organizational and technical measure~ carried out in
- the locomotive �acilities.
Expenses are planned and taken into account by items in each facility. Expenses for
_ one or several jobs of the same type or production operations are taken into account
in an individual item. For example, expenses for wages and materials which are
necessary to carry out work on routine maintenance and technical inspection of
freight cars at points where they are prepared for loading are taken into account
in the expense item "Inspection and routine maintenance of freight cars during
preparation of them for loading."
Moreover, operating expenses of railroads are taken into account and planned by
elements of expenditures: wages, deductions for social insurance, fuel, electric
power, materials, depreciation deductions and miscellaneous expenditures. Wages
and depreciation deductions occupy the greatest specific weight.
The structure of the operating expenses of railroads by elements of expenditures
for 1977 is presented below (in percent):
Wages with Deductions for Social Insurance 40.1
Depreciation Deductions 31.6
Fuel g,(
Electric Power 7.0
Materials ' 7.0
- Miscellaneous Expenses 5.7
Total 100.0
The specific weight of individual elements of expenditures in the total sum of
operating expenses also varies in time. The specific weight of depreciation deduc- '
tions, which is related to the high rates of technical re-equipping of railroads,
increased especially significantly during the past few years.
The structure of the operating expenses of railroads depends on the volume of ship-
ments, techni~al equipping, level of labor productivity, norms of expenses and the
level of prices for materials, fuel and ~lectric power.
28.2. Method of Planning the Operating Expenses of Railroads
The plan of operating expenses i_s an integral part of the operational plan of rail-
� roads. It is worked out on the bas~s of data of the shipments plan, the plan of
rolling stock operation, the labor plan, the planned size of basic funds, the norms
of depreciation deductions, norms of consumption and prices for fuel, electric
power, materials and so on. The planned growth of labor productivity, improvement
in utilization of basic fund3 and rolling stock of railXOads and other reserves for
reducing the cost of shipments are taken into account.
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Monetary funds to support the production program are provided in the plan of
- operating expenses. These funds are required for payment of wages, to acquire
materials, fuel and electric poweY and to accomplish other expenditures.
The plan of operating expenses is worked out for line enterprises, divisions,
railroads and for the network as a whole. The procedure for workinq out the plan
of operating expenses is as follows.
Line enterprises work out a draft of the plan and present it to the planning-
technical-economic department of the railroad division. The dra�ts of the plans
are checked here, the expenses of the division are added to the expenses of line ,
enterprises and the summary draft of the plan for the division is presented to the
planning department of the railroad administration.
The plans of the operating expenses of divisions are reviewed and corrected in the
planning department of the railroad. The general railroad expenses and expenses
for maintenance of railroad control apparatus are added to the confirmed value of
expenses by divi;-ions. 'i'he total expenses for the railroad are determined as a
result.
The methods of planning the expenses in line enterprises, divisions and on rail- -
I
roads are different. But there are general principles on which planning of operat- ;
inq expenses in all subdivisions of rail transport is based. Let us consider the
order of planning expenses in the railroad by the elements of expenditures. i
Wages. All types of payment of both permanent and temporary railroad workers are '
taken into account by this element of expenditures. The wage fund is determined on
the basis of the number of workers and their average monthly wage. The method of
planning~ these indicators is considered in Chapter 27. ~
Deductions for social insurance. Funds for deductions for social insurance of
workers and salaried employees are transferred to social insurance organizations
- and are used to pay pensions and allowances upon loss of work capacity, to support -
wor}cers with passes to sanitoria and rest homes and to implement other rehabilita-
tion measures .
Deductions for social insurance are determined at Che rate of 7.5 percent of the
wage fund.
Moreover, deductions for social insurance are calculated from the total bonuses
paid f.rom the material incentive.s fund which are not included in the wage fund.
Depreciation deductions. The basic stock of railroa~~ wears out during operation.
Nbnetary expenditures, which are called depreciation deductions, are necessary to
restore it.
The planned value of ~epreciation deductions is determined on the basis of data on ;
the presence of basic funds for the beginninc of the planning period and on proposed
introduction of them into oper~?tion and taking out of operation. The basic produc-
tion stock of railroads, with the exception of least stock, and also dining cars,
mail cars and so on, are taken into the calculation.
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The total value of depreciation deductions consists of two parts: deductions for
total restoration (renovation) and deductions for major overhaul.
Depreciation deductions for total restoration ~v are intended for complete re-
placement of basic stock taken out of operation and are calculated by the formula
A� _ ~q�~ ( 28 . i )
where ~ is the balance-sheet cost of basic stock, rubles, and qV is the norm of
depreciation deductions for renovation, fraction of a unit.
The norm of depreciation deductions is the specific fraction (percent) of the cost ~
of basic stock which approximately reflects the value of the annual wear. The an-
nual amo unt of depreciation deductions is calculated by it.
' Depreciation deductions for major overhaul are intended to restore individual basic
parts and assemblies of equipment, machines and so on, i.e., to carry out major
overhaul. Medium overhaul is carried out on some basic stock, for example, on
locomotives at the expense of depreciation deductions and medium and hoisting re-
pair is carried out on the track superstructure.
.The size of these deductions Ak.r is calculated by the formula
an
- AK.p=~qK.p= t . (28.2)
where qk,r is the norm of depreciation deductions for major overhaul, fraction of
a unit, a is expenses per major overhaul, rubles, n is the number of major over-
hauls during the service life of basic stocl: and t is the service life of basic
stock, years. -
The total sum of depreciation deductions A can be determined by the formula
A Q ~9' - - ( 2 8 . 3 )
where q is the averaqe norm of depreciation deductions for renovation and major
overhaul, fractions of a unit.
The averaqe norm of depreciation deductions for all types of basic stock now com-
prises 5.1 percent throughout the railroad network, including 3.4 percent for major
overhaul and 1.7 percent for restoration. These values are different and fZuctuate
over a wide range for different types of basic stock.
Fuel. More than 90 percent of the total expenses for fuel on railroads goes to
train traction and approximately 10 percent goes to other production needs (heating
of production buildings and so on). _
Expenses for fuel for train traction are determined on the basis of the volume of
work in gross ton-kilometers (rail cars) and the norm of fuel consumption per
10,000 gross t-km and the price of one ton of fuel.
.
Expenses for fuel for miscellaneous production needs are determined as a function
of the prices for fuel, the norm of consumption for the index and the rating and
- operatinc~ time of the units .
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Electric Power. Expenses for electric power, like those for fuel, are taken into
account and planned individually fc~r train traction and miscellaneous production
needs. The specific rate of expenses for train traction comprises 85 percent and
that for miscellaneous needs comprises 15 percent of all expenses for electric :
power. ~
'i'he method of determining expenses for electric power for train traction is similar
to tnat for deternuning expenses for fuel. '
Expenses for electric power for miscellaneous production needs (operation of the
equipment oz machine shops, STsB and coc~nunications devices, lighting station
_ yards, service buildings and so on) aze determined by different methods. _
The amount of these expenses can be calculated on the basis of the number of dif-
ferent users of electric power (electric motors, devices, elECtric signalling sema-
phores and so on), their rating, length of operation and price of 1�kW hr of elec- _
tric power. -
The method of calculation by consolidated norms may also be used.
Materials. Expenses for raw materials and also for cancellation of the wear of `
. low-value and rapid-wearing objects and special clothing in operation are taken !
into account by this element of expenditures. The total expenses for materials is ~
indicated in the railroad with determination of expenditures for a single estimate ~
of the elements of track superstructure. The specific weight of individual facil- ~
ities in expenses on materials is different and comprises 0.4 percent for passenger,
2.3 percent for freight, 2.7 percent for traffic, 30 percent for locomotive, 44
percent for rail car, 16 percent for track, 0.9 percent for civilian structures,
2 percent �or signalling and communications, 1 percent for electrification and .
power engineering and 0.7 percent for miscellaneous.
One part of expenses for materials is determined on the basis of the volumes of ,
work, norms of expense per unit of volume and prices for materials. For example,
expenses for lubrication for locomotives and rail cars and for materials for repair
of rolling stock can be calculated by this method. ~
Another part of expenses is determined by the norms of consumption of materials
per object or device and by the number of these objects and devices. Expenses for
materials by a single estimate of elements of track superstructure, on maintenance
and repair of the contact system, STsB and communications devices and so on can ~
also be calculated. In this case the norms are established per kilometer of de- ,
veloped length of track, kilometer of developed length of contact system and per
kilometer of length of automatic blocking.
Another. part of expenses �or materials is determined on the basis of established
norms per worker, for example, expenses for special soap, special milk and special
clothing. Thus, expenses for special clothinq are calculated by the norms of
issuing it, the cost, period s of wearing and number of workers having the right to
receive special clothing.
Miscellaneous expenses. Miscellaneous expenses include those which are difficult
to include in any of the elements enumerated above. These are mail and office `
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expenses, stipends to workers detached for training, deductions from the cost of
uniforms, payment of the accounts of other organizations for work performed and so
on.
Expenses for uniforms are calculated on the basis of the numberof workers receiving
them at a discount, the size of the discount, the periods of wearing and the cost
of the clothing.
Part of miscellaneous expenses is determined by the level during the past period
with regard to possible reduction during the planned period.
Tne total of miscellaneous expenses is indicated in the railroad plan with determin-
ation of expenses for snow, sand and water control and centralized expenses. Ex-
penses for snow, sand and water control are planned on the basis of actual expendi-
tures per kilometer of developed length of track during the past three years with
regard to some increase of labor productivity 3ue to mechanization of this work.
Centralized expenses contained in the "miscellaneous" element are planned by MPS
and are included in tne specific fraction calculated by reduced ton-kilometers in
the planned extent of operating expenses of the railroad.
The tota]. sum of operating expenses for the railroad is indicated with determina-
tion of expenses for depot repair of rail cars.
Expenses f.~r depot repair of rail cars. These expenses are calculated separately by
freight and passenger cars on the basis of data on the stock of cars, frequency of
- repairs an3 prices per unit of repair. The number of passenger cars subject to
repair is determined by the registered stock by the railroad and the number of
~ freight cars is calculated by MPS and is reported to the railroad with indication
of the type of cars and the number of axles.
COPYRIGHT: Izdatel'stvo "Transport", 1978
~ 6521
CSO: 811~1~/0359
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FINANCES AND COST ACCOUNTING
Moscow EKONOMIKA I PLANIROVANIYE ZI~LEZNODOROZHIdOGO TRANSPORTA: EKONOMIKA ZI~LEZNO-
DOROZHI~iOGO TRANSPORTA in Russian Part l~signed to press 20 Sep 78 pp 292-294
[Excerpt from Chapter 31 from the book "Ekonomika i planirovaniye zheleznodorozhnogo '
transporta: ekonomika zheleznodorozhnogo transporta" Izdatel'stvo Transport, 1
15,000 copies, 352 pages]
[Excerpt~ 31.4. The Basic Stock of Railroads '
Basic stock is required by railroad enterprises to accomplish the transport pro-
cess. It participates in multiple fashion in the production process, retaining a ;
natural-real form. The cost is partially transferred to the manufactured product ;
according to the amount of wear and is included in the type of depreciation deduc-
tions in its cost.
Basic stock is divided into production and nonproduction. Basic production stock
includes the means of labor of production designation--locomotives, rail cars,
track structures, workers and power machines, equipment, buildings, signalling de-
vices and so on. Basic nonproduction stock is apartment buildings, cultural-service
buildings and sports buildings and so on. They comprise 10 percent of the basic
stock of railroads.
The structure of the basic production stock of railroads is presented below (in
percent):
Buildings ~'6
Structures 55.5 ~
~ Switching Devices 5'2
Machines and Equipment 5'2
Transport Equipment . 25'9
Tools, Inventory and Other Stock 0.6
Zbtal 100.0 ~ ~
Structures (roadbed, track superstructure and artificial structures) and transport
equipment (locomotives, rail cars, motorcar sections and so on) occupy the highest ~ ~
specific weight. More than 80 percent of basic production funds goes to them.
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Scientific ar.~ technical progress accomplished in rail transport determined the
high rates of increase in the cost of basic stock. Thus, it increased from 50.9
billion to 63.8 billion rubles during the period 1971-1975.
The cost of basic stock of rail transport will increase by an additional 21.5 per-
cent during the lOth Five-Year Plan.
Basic stock is assigned to cost-accounting enterprises of railroads and is reflected
on their balance sheet. An estimate of objects of basic stock is made:
by the initial cost, i.e., by the cost at the moment of development or
acquisition;
by restoration cost, i.e., by the cost which is required to reproduce objects
of basic stock under modern conditions based on existing prices;
by the residual cost: which is the initial or restoration cost of basic stock
with deduction�for wear.
The basic stock used by rail transport enterprises is put into operation in differ- -
ent years; therefore, its initial cost is added on the basis of di�ferent prices
for equipment, materials and so on. Basic stock is re-evaluated periodically to
obtain a one-time evaluation. This re-evaluation was carried out as of 1 January
1972. As a result of the re-evaluation, the cost of basic stock of rail transport
- increased by 26.~ percent.
Duri*+n use, basic stock wears physically, i.e., part of the material-real proper-
ties ~.s expended. Besides physical wear, there is also moral wear, the value of
which increased especially under conditions of scientific and technical progress.
There are two forms of moral wear. The first is caused by a reduction in the cost
of new means of labor compared to existing means due to an increase of social labor
productivity. TY:e second is related to introduction of more productive and more
effi~ient rolling stock, machines and so on, which determi.nes the need to replace
still physically suitable means of labor with new means. For example, steam loco-
motives were replaced by more economical locomotives--electric and diesel
locomotives.
Improving the use of production stock is one of the important conditions for in-
creasing production and increasing its efficiency. The need for a significant in-
crease in the level of utilization of basic stock was noted at the 25th CPSU
Congress.
The indicators for the use of the basic stock of railroads are:
~ stock return--the number of reduced ton-kilometers per ruble of basic produc-
tion stock;
stock capacity--the cost of basic production stock per 1,000 reduced t-km;
stock ratio--the cost of basic production stock per worker of operating con- -
_ tingent of railroads.
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The stock ratio of railroad workers increased as a result of scientific and tech- `
- iiical progress in rail transport. Thus, whereas the stock ratio comprised 16,600
rubles in 1965, it reached 30,800 rubles in 1975, i.e., it increased by 88 percent.
The stock return, which comprised 55.7 t-km per ruble of cost of basic production
stock in 1975, is increasing systematically. The growth of the stock return per-
mits assimilation of a large volume ~f shipments without additional investments in
basic stock. The level of stock return depends to a significant degree on the use -
of rolling stock. An increase of locomotive and rail car productivity, especially
acceleration of freight car circulatian, an increase of the weight and speed of
train traffic, an increase of loading of freight cars and an increase of the popu-
lation of passenqer cars are main factors for an increase of the stock return on
railroads.
Payment for stock was introduced by decision of the September (1965) Plenary Ses-
sion of the CPSU Central Committee to increase the responsibility of enterprises
for utilization of basic productio~i stock. Payment is made to the profits budget
of the enterprise. The norm of payment for the railroad network as a whole is
established at the rate of 6 percent of the average annual co~t of basic produc-
tion stock and the normalized circulating funds. It is differentiated by individ-
ual rai lroads and fluctuates from 1 to 8 percent. Moreover, the railroads con- i
tribute an additional payment at the rate of 100 rubles per month per physical
rail car of the freight fleet for surplus fleet of freight cars formed as a result
of slowing down rail car circulation. The total payment for production stock is
reduced at the same rate for each rail car saved upon acceleration of rail car
circulation.
The following main funds are released from the payment:
those created at the expense of the production development fund--over a period
of two years;
those created due to bank credit--until the credit is completely used up;
of newly operational enterprises and shops--for the normative period of as-
similation of design capacity;
those preserved by decision of the state; ,
those intended for purification of water and air basins.
The better enterprises utilize basic production stock, the smaller the fraction of
profits that is put into the budget in the form of payment for them and conse-
quently the higher the profits remain at the disposal of the enterprise and are
deducte3 to the economic incentives funds.
COPYRIGHT: Izdatel'stvo "Transport", 1978
6521
CSO: 81L~4/0359
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RAILROAD TARIFFS AND DETERMINATION OF PAYMENTS FOR SHIPMENTS
Moscow EKONOMIKA I PLANIROVANIYE ZHELEZNODOROZHI30G0 TRANSPORTA: EKONOMIKA ZHELEZNO-
DOROZHNOGO TRANSPORTA in Russian Part 1 signed to press 20 Sep 78 pp 300-304
[Excerpt from Chapter 32 from the book "Ekonomika i planirovaniye zheleznodorozhnogo
- transporta: ekonomika zheleznodorozhnogo transporta" Izdatel'stvo Transport,
15,000 cop ies, 352 pagesJ
[Excerpt] 32.2. Existinq Tariffs for Freight Shigments
Existing tariffs in rail transport are divided into general, local and exceptional.
General tariffs are used in shipments of the majority of freight on the entire
railroad network. Local tariffs are established by the chiefs of railroads in
shipments of freight on lines not included in the general network of railroads, in
stable empty directions (local traffic), on river crossings and so on. Exceptional
tariffs may be higher or lower ~than general tariffs as a function of the task posed
~ by the state.
There is a small number of exceptional, primarily reduced tariffs on USSR railroads.
For example, reduced tariffs are applied to freight shipments in mixed rail-river
traffic, to shipments of some freight to remote regions and so on. For example,
a tariff for shipment of automobiles in d.isassembled form by rail for a distance
up to 300 km is increased (in these cases it is more feasible to transport the
automobiles under their own power).
Table 32.1. Differentiation of Tariffs by Types of Freight Upon Shipment to
Distance of 900 km
T~pN~M~~ l~J T~QN~H~~~~
_ PoA TYaa rr~~x~. I PoA ~PY~~ rrasKa.
roN10 ntr xoM10 ncr
~ 3 ~ 3,53
Koxc . . . . ~ . � 2,61 3epxo ~ . . . ~ . �
(IecoK , . . , . . 2,67 CTexao nHrroea ~ ~ � 7~b4
(Tpoxar (5~. . . . . 3,12 XnonoK-cdpeu (0) � � �
~lecetie (KPYtn~bj 8~8 Kt~O~H . . . . . . 5,63
aoMaTepHand)
[Key on following page]
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~
cvt~ vrr~~.a~a.. vv., v......
[Key continued from preceding gagel:
1. Type of freight 6. Forest (timber and lumber)
2. Tariff rate, kopeck/10 t-m 7. Grain
~ 3. Coke 8. Plate glass
4. S~nd 9. Raw cotton
5. Rc~lled steel . 10. Kerosene
Two-rate tariffs for all freight are used in rail transport. The tariff rates are ,
established with these tariffs for initial-final operations for a total of 10 tons
and for traffic operation per 10 t-]an. Two-rate tariffs permit the railroads to
have equal profitability of shipments at any distances. They create conditions
for more efficient distribution of shipments by types of transport and for mechan-
ization and automation of tariff payment calculation. Income from shipments with _
two-rate tariffs is distributed more regularly throughout the railroads than with
- single-rate tariffs and conditions are created to eliminate losses in shipments of
some freight over short distances. .
As indicated, existing tariffs are differentiated by types of freight, the distance
of shipments, types of shipments and speed of shipments.
An example of tariff differentiation by types of freight is presented in Table 32.1.
Two-rate tariffs are differentiated by distance of shipments automatically at any
distance since the tariff payment is added from the two components of the values ,
r
(see formula p2.1) ) �
~1)
/ -
l
! ?T~~
I ;
_ r~
Eigure 32.1. Variation of Cost and Tariff Rate as a Function of Distance:
1--tariff rate per 10 t-km; 2--cost of shipments of. 10 t-km
Key: �
1. Kopecks ,
As distance increases, the fraction of the tariff for initial-final operations in ~
- the total value per 10 t-lan is reduced, but everything remains rather significant
(for example, it comprises approximately 18 percent in shipments of grain for a ~
distance of 1,800 km). . `
The nature of variation of tariff rates is identical for all freight as the dis-
tance increases. This variation corresponds to variation of cost (Figure 32.1).
The gap between the curve of the tariff rate and the cost curve indicates the
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level of pxofitability of shipments for a given type of freight. The level of
profitability is identical at any distance.
Tariffs by types of shipments are differentiatecl so that their level when calcu-
lated per 10 t-]an of given freight is least for separate rail car shipments and
qreatest for smal 1 shipments.
Tariff rates by sin~ le car shipments are calculated per car and the distance of
shipment regardless of the amount of freight loaded into the car. This stimulates -
more complete utilization of the carrying and load capacity of the cars.
Tariff rates in shipment of freiyht in containers is higher than in separate car
shipments. Thus, when shipping c~anfectionery articles (except flour) in containers
weighing five gross tons, the t:sriff payment is approximately 40 percent hig2ier
compared to separate car ship,r,ients. The difference in tariff payments will be even
higher when shippinq in contrainers of smaller capacity. Shipments of freight in
containers requires special expenditures re lated to expediting operations, mainten-
ance of container platforms and repair and maintenance of containers. Expenses
for container shipments increase even more compared to shipments in cars because
empty containers travel long distances.
Tariff rates in shipment of freight in containers have been established for initial-
final operations per 10 tons or per container and those for traffic operation have
been established per 10 t-km or per container-km. The capacity csf the containers
is taken into account in the rates. The tariff payments in container shipmpnts is
recovered for the total calculated capacity of the container regardless of the
actual weight of the freight.
A unified tariff scheme which provides differentiation of rates as the weight of
the shipment varies has been established for payment of freight shipments in small
lots. rt is taken into account that expenditures per unit of shipments related to
deterioration of the capacity and volume of the car increase as the weight of the
_ shipment decreases, expenditures for so rting shipments, formulation of documents
and so on increase.
Tariff rates are differentiated for small shipments up to one ton with the weight
being rounded aff to 0.1 ton. With small shipments weighing from 1 to 10 tons,
the tariff rate per ton is constant, b~it it is higher than in separate car
shi.pments.
Tariff rates in freight shipments in constant-temperature cars with and without
refrigeration is highex than during shipments in ordinary boxcars. Thus, when can-
ned goods are shipped in separated car shipments in constant-temperature cars with-
out refrigeration over a distance of 300 km, the tariff rate is 2.3-fold higher
and when they are shipped in constant-temperature cars with refrigeration, it
exceeds 3.8-fold the tariff rate compared to shipment in boxcars. This increase
of rates is explained by the higher cost of freight shipments in constant-temper-
ature cars compared to ordin~ry cars.
Tariff rates also increase during express freight shipments.
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It has been established by existing regulations that treight owners pay for ship-
ment by the shortest distance regardless of the actual distance covered by the
. freight.
So-called planned roundabouts are provided in the shinping plans ^f railroads on
some lines of the network. But even in these cases the tariff payment is recovered
for the shortest direction of travel rather than for the roundabout direction.
Exceptions to this rule are permissible only in cases provided by tariff manuals.
The name of the freight should be brief and precise in documents presented by the
freight shipper. The a:nount of the tariff payment frequently depends on the cor-
rectness of indicated name. Thus, shipments of stone are paid according to differ-
ent tariffs as a function of whether this is quarrystone, slag or asphalt stone.
The tarif�s in shipments of construction and refractory brick are different: higher
tariff rates have been established for shipment of refractory brick than for ship-
ment of construction brick for the same distance.
Freight which has no name in the nomenclatur~ is presented for shipment in some
cases. The distinctive feature of the freight must be indicated in the shipping
documents to relate this freight to some specific tariff group. For example, :
"valokordin" freight is presented for shipment. This name of freight is not in- ~
cluded in the nomenclature. But it is sufficien+ write that valokordin is a '
medicine to relate it to the group "Miscellaneous med~cinals not named in the !
l
alphabet." ~
Table 32.2. Distance Belts Adopted on USSR Railroads '
Shipping Distance, km Length of Distance Belt, km Number of Belt
. .
From 1 to 50 5~ 1
From 50 to 100 10 ~ 5
From 101 to 300 20 10 ;
From 301 to 600 30 10
From 601 to 1,000 40 10
Prom 1,001 to 1,500 50 10 _
From I,501 to 5,500 100 40 ~
From 5,501 to 13,500 200 40
W'hen determining the tariff x-ate, the weight of the freight is rounded off. A
shipping weight up to 10 tons is rounded off to full 100 kg. Shipping weight of
more than 10 tons is rounded off to total tons. Thus, a shipment weighing 15.4
tons is rounded off to 16 tons. The weight of packaging is included in the ship-
ping weiqht. The minimian distance when determining freight fees is determined at ,
50 km.
To simplify tariff calculations, the ~hipping distances are taken into account by
distance belts (Tahle 32.2). The tariff rate is each belt is levied at an iden-
tical rate regardless of the actual shipping distance. The distance of the belts
also increases with an increase of shipping distances. ,
Rail transport bears additional expenditures in some cases which should be covered
by the freight owners. These expenditures are levied in the form of special
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duties, the name and value of which are established by the existing tariff
system.
The following types of duties are now used: for storage of freight in railroad
warehouses and on platforms above the established deadline, for weighing freight
and checking the weight, for dis infection of rail cars and door panels, for deliv-
ery of rail cars to extraordinary-use spur tracks, for informing freight consignees
of the approach of freight (by agreement), for taking freight across the Amur
River and Kerch' Stra.it, for use of inetal straps in timber shipments, for accompany-
ing freight by a railroad conduc tor, for expediting operations and for loading-
unloading operations using railroad equipment.
Mutual responsibility for adhering to plans, rules and procedures for organization
of freight shipments is provided for material action on the freight owners and the
railroads. A system of fines paid by freight owners or railroads in cases provided
by the rules has been established. Payment of fines affects the aost-accounting
indicators of enterprises.
_ COPYRIGHT: Izdatel'stvo "Transport", 1978
6521
CSO: 811~4/0359
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. ~
~
_ ~
,
~
PLANNING THE FINANCES OF RAILROADS
Moscow EKONOMIKA I PLANIROVANIYE ZHELEZNOD~ROZHIdOGO TRANSPORTA: EKONOMIKA ZHELEZNO- ~
- DOROZHI~10G0 TRANSPORTA in Russian Part l~signed to press 20 Sep 78 pp 309-323~ ;
[Chapter 33 from the book "Ekonomika i planirovaniye zheleznodorozhnogo transporta:
~ ekonomika zheleznodorozhnogo transporta" Izdatel'stv~ Transport, 15,000 copies, ~
352 pages] ~
~
[Text] 33.1. Planning of Incame ~
Monetary funds received for completed shipments, operations or services rendered
are called income.
- Railroads receive income from shipments, sales of the products of auxiliary enter- ~
prises and for rendering services to passengers and freight owners at stations. :
The main part of railydad income (approximately 85 percent) is comprised of income i
from shipments. It consists of income from freight, passenger, baggage and mail .
shipments, of miscellaneous income and supplementary fees (for loading, unloading .
and storage of freight and so on). The structure of railroad income from shipments ~
is presented below (in percent): ~
Income from Shipments: ~
freight 79�9 '
- passenqers 17.3 ;
~ggage 0. 2 ;
mail 0.3 .
- Miscellaneous Income 0.3 . ~
Supplementary Fees 2�~ ~
Total 100.0 !
The planned total income is determined on the basis of the planned volume of
- freight, passenger and baggage shipments and the existing tariff system. The
level of average income rates is determined on the basis of tari.ffs for each type
of shipment. ;
The total freight f ee per unit of shipments is called the income rate. It is ,
calculated per 10 t-km o� freight shipments, 10 passenger-lan of passenger shipments
and for 10 t-km of reduced expenditures.
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The level of the average income rate for freight shipments depends on the structure
of the freight, the distance and speed of shipment, the type of shipment, the de-
gree of loading rail cars and other factors which affect the size of freight levies.
The content of the income plan from freight shipments is presented in Table 33.1.
Table 33.1. Plan of Income From Freiqht Shipments
Income
Unit of Rate,
Measurement kop/10 Income, _
of Volume Volume of t-km or Million
- Item of Income of Shipments Shipments Kr~p/ton Rubles
Income from freight shipments -
(traffic operation) { Million t-km 95,000 3,271 310.7
!
Income fr~m initial freight ~ _
operations: I
coal, ore and ferrous metals~ Mi.llion ton 76.0 20 15.2
petroleum products i Million ton "
remaining freight I Million ton 43.0 30 12.9
Income from final freight i
operations: ~
coal, ore and ferrous metals' Million ton 20.5 20 4.1
petroleum products ~ Million ton 16.0 50 8.0
remaining freight ~ Million ton 54.U _3~ 16.2
I 7.3
Supplementary fees ,
~ -
Total " 374.4
Average income rate per 10 t-km, 374.4�106�102'10 _ 3.941.
kopecks 95,000�10
The passenger traffic turnover with division into direct, local and suburban traf-
fic, the income rate per 10 passenger-]an for each type of traffic and the total
income from passenger shipments are indicated in the income pZan from passenger
shipments. Moreover, income from forming-up of trains is determined by multiply-
ing the number of formed-up direct trains by the established calculated prices per
train. Income from baggage and mail shipment are calculated here as well. The
average income rate per 10 passenger-}an is determined after adding all income from
passenger shipments by dividing the total income by passenger-kilometers.
In fulfilling shipments, railroads render different services to passengers and
freight shippers (preliminary sale of tickets, delivery of tickets and baggage to
the home, storage of baggage, providing information about the arrival of freight
and so on). The railroads receive income from these services, which is called
local income of stations. This income is used to cover expenses to render services
and also for development and repair of terminals. This income comprises approxi-
mately 0.6 of the income received from shipments.
33.2. Planning of Profits.
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~
The profit of railroads is the monetary expression of the cost of the surplus ~
product created by workers of transport enterprises. .
- Maki.ng profits is not the purpose of socialist production since social development
is subordinate to the task of more complete satisfaction of the needs of the Soviet ,
man. At the same time profit is of important siqnificance for successful develop-
- ment of socialist society. It is the main source of expanded production. The
higher the profits in the national economy, the greater the opportunities for
raising the material and cultural level of the Soviet people. The size of profits
reflects the financial results of the economic activity of an enterprise and the
contribution of each enterprise to the financial resources of society.
Profit is determined by comparing the income of the enterprise received from ship-
ments or performing other w~ork to expenses to perform these shipments and work. ~
If income exceeds the total expenses, the difference determines the sum of the prof-
it received. In cases when expenses are greater than income, an enterprise has a
loss. All railroads and divisions are profitable.
Profit is an artificial indicator which provides the generalized characteristic of
the economic activity of an enterp~ise: fulfillment of the plan in .*.he volume of
shipments, the quality of utilizing rolling stock and other basic stock, labor i,
productivity, adherinq to the norms of consumption of materials, fuel, electric I
power and so on .
The profit on railroads is increasing at high rates. It increased by 49 percent ~
during the Ninth Five-Year Plan. In 1976 rail transport received approximately ;
seven billion rubles of profit. ,
The total balance-sheet profit is confirmed as a directive indicator for the rail- _
roads. It includes profits from shipments, from sale of operations and services .
of auxiliary enterprises (loading-unloading operations, transport-expeditious op-
erations, sale of electric and thermal power and water to the populace and so on)
- and also a prof it or loss from miscellaneous operations (penalties, fines, for-
feits, losses from writing off unreliable debts and so on). Profits from ship-
ments comprises the majority (almost 90 percent). :
The total profits from shipments can be determined by two methods: by direct cal-
culation and by analysis. ;
The method of direct calculation is the main one and permits more precise determin- ,
ation of the total profit. Tf this method is used, the profit per 10 reduced t-lan
is calculated as the difference between the average income rate and the cost of
shipments. This difference is multiplied by the planned total shipments to deter-
mine the total profits. ~
Profit is calculated by direct accounting by the formula
l1=J.j-C=EPI (8-c) : 10: 100, (33.1)
where D is income from shipments, C is expenses for shipments, a is the income
rate per 10 reduced t-lan, kopecks and c is the cost of 10 reauced t-km, kopecks.
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For example, if the income rate per 10 reduced t-km according to the 1978 plan is
equal to 4.2 kopecks, the cost is equal to 2.5 kopecks and the volume of shipments
is 103 billion t-km, the planned profit comprises 103 billion�109(4.2 - 2.5) ~
: ].,000 = 175.1 million rubles.
The analytical method of calculating profit consists in the fact that the effect
of economic factors (the volume and structure of shipments, cost and income rates)
on the amount of profit of the planned year is established compared to the previous
year. Let us assume that the profit of the year preceding the planned year com-
prised 164.8 million rubles. A reduction of shipping cost by 0.1 kopecks is pro-
vided in the planned year. Because of this, the profit with volume of shipments of
103 ~billion t-km will increase by (103 billion�109�0.1) - 1,000 = 10.3 million
rubles. The profit of the planned year will be (164.8 million + 10.3 million) _
= 175.1 million rubles.
The profit from sale of the products of auxiliary enterprises is determined on the
basis of the planned volume of operation (services), the level of prices and the
cost of a unit of work (services).
33.3. Distribution and Use of Profits
Not only the total profit received but its distribution to the profit remaininc~ at
the enterprise's disposal and to the profit transferred to the state budget are of
important significance to an enterprise. _
The procedure for distribution of profit is determined by state decrees. The
profit is first directed toward obligatory payments to general state funds: on
installment to the payment budget for basic production funds and normalized cir-
culating funds and installment of fixed payments,* and also on payment of percent-
ages for bank credit.
The profit remaining after exclusion of obligatory payments is called the calcu-
lated profit. Deductions to the economic incentives funds are initially taken from
the calculated profit, then part of it is directed toward financing of capital
investments, cancellation of lonq-term credits, to increase circulating funds, to
cover planned losses on housing-communal facilities and expenses on economic main-
tenance of cultural-ser~ice institutions and to create a reserve to render finan-
cial assistance to enterprises. The total remaining after all these payments and
deductions is the free remainder of profit which is transferred to the budget.
The distribution of profit is shown in Figure 33.1.
Enterprises receiving a profit greater than was provided by that planned have an
above-plan profit. It is used for above-plan installments of payment to the funds
, and percentages for bank credit, for supplementary deductions to the economic in-
centives funds, for payment of bonuses awarded by I~S for results of the All-Union
socialist competition and to cancel credits received to introduce new equipment.
The free remainder of above-plan profit is paid into the budget.
*
Fixed payments are established for enterprises under specially favorable natural
or other exceptional conditions. These payments are not used in rail transport.
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' ~ ~ � ~
. ~1~ 6onancoQo~ npu6ein? ~ ;
pnomo ao g np.~eNnar v~urcnpadox?rue '
n~e~a~me~NN~K ~oNB~i ~a~6aKRODc~u~1 Kpedum nnon~extu
( 5 ) Pocwem~a apu~6s?a? '
(8) ~
No odpa~odoMUe ~ Mo pocuiupeMw No coyuonrne-K~a`mypx~a ~
~cMaoe ~pc+~~eoaF~eo poe~oau u a~NOai ~
1lamepuonu~o~o (l0~uxoncupohMUS ~~~A~ y6~K0~ '
' ~9~ noow eMUa xonuaonuuu Iaoaicerat no~cuna~yno-xo anuawy
p xoaa0e~y
. ~ ~
Coyuon~no-Ryuwmypr?ux (13) ' Codepxanue !
~+eponpuemuu u xunu~yNOto p~~~~M~ xyn~mypa-armo0~~x '
(lZ ~mpoumeircmeo ~~locpew~?~x ~pe,au~oo9 . (14 ) yypexaaNU~
- ~
� I03OW11U11 ll W~OOBCRIEO ~o~aenve KpeOumo n~ IaepB auMUCmepanse , ~
M~eBpenue xo0o~ m~xnuKu
. . . ~
qpy:~x y~o~aoe u, Ilpupoc~+ MopMOmuQs o6or~~~ ocmamac npu6wu; ~
npu0~uu e 0 . neOeBoaae.!~~r 0 6ro8~cew . 20
Figure 33.1. Diagram of Balance-Sheet Profit Distribution ~
i
Key: ~
1. Balance-sheet profit ;
2. Payment for production funds , j
_ 3. Percentaqes for bank credit ~
4. Fixed payments '
5. Calculated profit ,
6. To formation of funds
7. To expansion of production ;
8. To social-cultural expenses and installments ;
g. Material incentives ~
10. Financing of capital investments 1
11. Covering losses to housing-communal facilities
12. Social-cultural measures and housing construction ~
13. Cancellation of lonq-term credits ~
14. Maintenance of cultural-service institutions ,
15. Development of production ;
16. Cancellation of credit for introduction of new equipment
17. Reserve of ministry ~
18. Other funds from profit ~
19. Increase of norm of circulating funds '
20. Free remainder of profit transferred to budget '
If enterprises do not fulfill the profit plan, they receive fewer funds for their
needs compared to those provided by the plan.
'
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Distribution of railroad profits during the past few years has been characterize3
by the following data (in percent): -
Profit Transferred to General State Funds:
Payment for basic production funds and normalized
circulating funds 47.0
Percent for bank credit 0.3
Free balance of profit 18.5
Total 65.8
~ Profit Remaining at the Railroad's Disposal:
Deductians to econonic incentives funds 10.2
Financing of capital investments and cancellation of
long-term credit 19.0
Covering losses for housing-communal~facilities 1.3
Bonsses from socialist competition 0.3
Other types of expenditures 3.4
Total 34.2
~ Total 100.0
The railroads transfer a significant part of profits (more than 65 percent) to
the budget in the form of paymen~s to funds and of free balance of profit.
Approximately 35 percent of all profit is at the railroad's disposal, of which more
than 10 percent is used to form economic incentives funds and approximately 20 per-
aent is used to finance capital investments.
33.4. Planning the Level of Profitability
Socialist society is interested not only in the mass of profit but also in the size
of it with respect to monies invested in bas~c production funds and circulating
funds, i.e., the level of production profitability. The indicator of profitability
~ is established by railroads as a state planned task. Total and calculated produc-
tion profitability are distinguished.
Total profitability R~ is determined in percent by relating the balance-sheet ~
grofit to the cost of basic production funds and normalized circulating funds. I:t
can be calculated by the formula
~~~o.y~'~o.a'100~ ~ (33.2)
where IIb is balance-sheet profit, ~o.Pr is the cost of basic production funds and
os.n is the cost of normalized circulating funds.
Total profitability is a criterion for evaluating production efficiency.
In 1976 the total profitability of railroads was 10.3 percent or 10.3 kopecks of
profit per ruble of basic production funds and circulating funds.
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Calculated profitability Rr is determined in percent by relating the calculated
profit to the cost of basic production funds and normalized circulating funds.
Basic production funds released from.payment according to established taxes are
not used in the calculation in this case: The amount of calculated profitability
is determined by the formula
~ np . (33.3) ~
RD ~o.ap-~.oP'+'~o.~
where IIr is calculated profit and ~o.Pr is the cost of basic production funds freed
from payment to the budget.
Calculated profitability shows how much profit remaining to the enterprise after
payment to funds and payments of percent for bank credit goes per ruble of cost of
basic production funds and circulating funds. Calculated profitability comprised
4.5 percent in 1976 for all railroads.
'The total and calculated profitability are determined according to plan and ac-
counting of the railroad. Comparison of the planned and accountable profitability i
characterizes the level of fulfilling the planned tasks.
~
33.5. Economic Incentives Fux?ds (
~
An important role in solution of the problems posed by the 25th CPSU Congress to _
improve the economic effectiveness of productian belongs to economic incentives.
Through correct construction of a material incentives system, finances actively
affect acceleration of scientific and technical progress, an increase of product
quality, improvement of material and labor resources and in the final analysis an
increase of the economic effectiveness of production. ~
Material stimulation of railroad workers is achieved from monies of economic in- ~
centives funds: the material incentives fund, the fund for social-cultural mea-
� sures and housing construction and the production development fund. '
The main one of these funds is the material incentives fund, to which two-thirds ~
of deductions to the economic incentives funds go. It is intended to create the ;
material interests of each worker and collective of the enterprise as a whole to ;
achieve the maximum production effect. The source of formation of the material
incentives fund is enterprise profits. The total ~rofit deducted to the material
incentives fund is determined by comparison of the five-year plan, the annual
plan and upon totallinq the results of enterprise operation during the year.
The size of the material incentives fund for the five-year plan is established by ~
a superior organization according to years of the five-year plan. When the annual
plan is compared, enterprises can adopt higher or on the contrary lower pledges
than was provided by the five-year plan. The total material incentives fund is
increased by an increase of indicators in the annual plan compared to the five-
year plan and is reduced by reduction of indicators.
T'he indicators on which the size of supplementary deductions to the material in- ~
centives fund depends are called fund-formi.ng indicators. These indicators for
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railroads ar~d ~ivisions are usually an increase of labor productivity, reduction
of shipping cost, an increase of calculated profit and acceleration of rail car
circulation. In this case the number of fund-forming indicators should not be
greater than three. �
A norm of deductions of profit to the material incentives fund is established for
each fund-forming indicator. These norms are expressed in percent of the total
material incentives fund according to the 1975 plan.
bcample. The norms of deductions from profit to the material incentives fund for
the railroad have been established in the following amounts: 1.9 percent per 1
percent of increase of labor productivity, 2.5 percent fo~ 1 percent reduction of
shipping cost and 0.5 percent for 1 percent growth of calculated profits. The
material incentives fund is equal to 17 million rubles according to the 1975 plan.
Upon comparison of the annual plan for 1978, the railroad envisioned an increase
of labor productivity by 0.4 percent compared to the task for this year according
to the five-year plan, a decrease of shipping cost by 0.3 percent and an increase
of calculated profits by 1.2 per~ent.
The material incentives fund provided by the five-year plan for the given year in
the amount of 19 million rubles will be increased:
due to an increase of labor productivity by
(0.4�1.9�17,000) ~ 100 = 129,200 rubles;
- for reduction of shipping cost by
(0.3�2.5�17,000) ~ 100 = 127,500 rubles;
for an increase of calculated profit by
(1.2�0.5�17,000) ~ 100 = 102,000 rubles.
The total increase will compxise 358,700 rubles. As a result the material incen-
tives fund according to the annual plan will increase to 19 million + 358,700 =
= 19,358,700 rubles.
The actual total of the material incentives fund depends on the level of fulfill-
ment of the plan according to fund-forming indicators. If the plan is overfulfil-
led, the supplementary deductions are made according to the norms reduced by not
less than 30 percent. If the plan is underfulfilled according to fund-forming
indicators, the planned total of the material incentives fund is reduced according
to the norms increased by no less than 30 percent.
A decrease of the norms of the material incentives fund when calculating supple-
mentary deductions for overfulfillment of the plan and an increase of them upon
calculation of the total decrease of the fund for underfulfillment of the plan
create incentives among enterprises to adopt intensive, but realistic planned
tasks. Besides deductions from profits, funds allocated for awarding bonuses to
workers from the wage fund are included in the material incentives fund.
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When planning the material incentives fund, one must providE a proper ratio between
an fncrease of labor productivity and an increase of the average monthly wage of
enterprise workers.' If the growth rate of wages at the enterprise exceeds the
growth rate of labor productivity with regard to payments from t'~e material incen-
tiVes fund, then part of this fund is reserved or transferred to the fund for
social-cultural measures and housing construction.
Monies included in the material incentives fund from the wage fund are used only
to award bonuses to enterprise w~orkers. Deductions to this fund, made from profits,
are used: ~
to award bonuses to workers (in addition to bonuses from the wage fund);
to award bonuses to managers, engineering and technical personnel and salar-
ied employees;
for one-time incentives to workers distinguished upon fulfillment of especial-
ly important tasks;
to pay for awards from the annual results;
to award bonuses from the results of the socialist competition within the ~
enterprise; ~
~
to rend~r one-time assistance to railroad workers; '
to award bonuses to junior maintenance personnel and workers of other enter- ~
prises who contribute to improving the utilization of rolling stock.
The material incentives fund is distributed by individual directions of use in the
estimate of fund disbursement which is confirmed by the enterprise management .
jointly with the trade-union comanittee.
The material interests of enterprise collectives to increase production efficiency
is created not only by awarding bonuses but also by more complete satisfaction of
the spiritual needs and improvement of the housing conditions of the workers. The .
fund for social-cultural measures and housinq construction has been created for
this purpose at rail transport entexprises. It is also formed from profits of the
enterprise. ~
Th~ amount of the profit deducted to this fund is determined by the norm expressed ;
in percent of the material incentives fund. Let us assume that the material in-
centives fund of the railroad is equal.to 19,358,700 rubles. The norm for deduc- ~
tions to the fund for social-cultural measures and housing construction is 30 per-
cent. Deductions to this fund will then comprise (19,358,700�30) ~ 100 =
= 5,807,600 rubles.
Monies of the fund for social-cultural measures and housing construction are di-
rected for construction of apartment buildings, cultural-educational and children's
preschool institutions and also enterprises of communal-service designation (up to
60 percent of the fund is expended for these purposes). Enterprises can accomplish
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cultural-service and medical service of workers, can carry out rehabilit~tion and
sports measures, can improve the feeding of children in kindergartens, day-care
centers and Pioneer camps and can reduce the cost of feeding in dining halls,
snack bars and so on from the monies of this fund. The railroads utilized 150
million rubles for these purposes in 1976.
An important condition for ~ncreasing production efficiency is introduction of new
equipment and advanced techno~ogy at enterprises. Consequently, the enterprises
should have at their disposal financial resources which permit them to solve in-
dependently problems of production development and introduction of new equipment.
Thsse resources are created by formation of the productian dev~lopment fund. Part
of the enterprise profits, part of the depreciation deductions to restore basic
stock and the income from sale of eliminated and surplus property are calculated
~ to this fund.
The total profit and depreciation deductions directed tc the production development
fund is determined by the norms established by the superior organizatidn.
' Monies of the production development fund are used to finance capital investments
for introduction of new equipment, mechanization and automation of production pro-
ces~es, modernization and renovation of equipment and improvement of production.
33.6. Financing of Capital Construction and Major Overhaul of Basic Stock
Expenditures to restore (replace) basic stock are capital investments.
7.b construct or reconstruct a railroad line, station, depot or other structure,
one must first carry out technical and economic calculations for each of them.
These calculations are formulated in the draft and estimates of construction.
Expenditures of labor, material and manetary resources required to carry out the
work provided by the draft are determined in the estimate. The cost of construc-
tion calculated in the estimate is called the estimated cost. It is the price of
the object of capital construction.
Sources of financing the state plan of capital investments include the railroads'
own resources and the centralized resources of the state. Depreciation deductions
intended for renevation, part of the profit from shipments, montes of the produc-
tion development fund, the fund for social-cultural measures and housing construc-
tion and so on are related to one's own resources.
The size of the profit directed to finance capital investments is determined by
comparing the financial plan of the railroad. Approximately 18-20 percent of
railroad profits are used for this purpose. More than 60 percent of all capital
investments are accomplished on railroads due to depreciation deductions and
profits.
State budget funds and long-term bank credit are related to centralized resources
of the state.
The effectiveness of capital investments, the period of their return and period of
cancellation of credit are determined to justify the ~otal credit.
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Crediting capital investments is an important economic stimulus for increasing the
effectiveness of capita 1 expenditures, acceleration of construction and adhering
to the normative deadlines for assimilation of the design capacity of new canstruc-
tion projects.
All funds intended for capital investments are kept in a special account at insti-
tutions of Stroybank of the USSR, which monitor the purposeful use of these funds.
Work on construction of objects and structures can be accomplished either through
the efforts of those enterprises for which the new construction is intended (the
cost-accounting method of construction) or by special construction and installa-
tion organizations through agreements with the customer (the contract method of
- construction). The main part (more than 90 percent) of work on capital construc-
tion on railroads is accomplished by the contract method.
Calculations between the contractor and customer for construction-installation
work completed prior to 1969 were usually made for the completed structural ele-
ments and types of work rather than for the finished object. Thi.s procedure of
calculations did not create incentives for the contractors to reduce the construc-
tion deadlines.
Calculations between the contractors and customers are now mainly carried out for j
objects completely constructed or for completed stages of work. This procedure of !
y calculations contributes to concentration of material, labor and financial re- . ~
sc~urces on starting objects, which reduces the construction deadlines and acceler- '
- ates introduction of production capacities into operation.
Basic stock must be permanent ly maintained in an operating state. This is achieved
by routine inspection and repair of them. The frequency of performing individual
types of repair has been established by MPS for each type of basic stock. Routine
maintenance and major overhaul are distinguished by financing s~urces. Expenses
on routine maintenance of basic stock are included in the expenditures on shipments
and are covered from enterpris e income.
Major overhaul is fir_anced from depreciation deductions intended for these pur-
poses. The railroads annually expend more than two billion rubles of basic funds
for major overhaul.
It is more efficient to carry out major overhaul of all objects located at a single
rail line rather than of individual stations, junctions and sections. Therefore,
MPS has granted the right to redistribute the depreciation deductions for major
overhaLl of rolling stock, roadbed, track superstructure and artificial structures
among the railroads.
33.7. The Financial Plan of the Railroad
The presence of financial resources is compared in the financial plan to the need
for them during the plaruling period. This comparison makes it possible to check
whether the tasks provided by the production plans, capital investments and major
overhaul and also the pledges before the budget, superior organization and banks
have been totally provided with financial resources.
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The financial plan is compiled in the form of the balance-sheet of income and ex-
penses and has four sections.
Table 33.2. Financial Plan of Railroad (Balance-Sheet of Income and Expenses)
Total, Total,
thousand thousanc~
Indicator rubles Indicator rubles
1. Income and Receipt of 2. Expenses and Deducti~n
Funds of Funds
Balance-sheet profit 252,000 Losses of housing-com- 3,400
munal facilities
Reduction of norm of
own circulating fun~s Increase of norm of 200
Increase of stable 120 own circulating funds
liabilities Reduction of stable ~
Income from sale of 2,150 liabilities
- property written off Expenses on economic main- 55Q
2,030 tenance of buildings and
_ structures transferred to
trade-union organizations
Depreciation deductions 136,400 Capital i.nvestments 94,335
Local income of stations 1,480 Expenditures for major 89,450
overhaul
Expenses for local income 1,250
of stations
Deductions to funds:
material incentives 15,960
social-cultural measures 4,788
and housing construction
production development 7,120
Total income 394,180 Total expenses 217,053
3. Credit~ Ratios
_ Receipt of Credits Cancellation of Credits
Long-term credit for capital Cancellation of long-term cred- 1,200
investments 4,~00 its for capital investments
~ Cancellation of credit for in- 410
troduction of new equipment
Payment for long-term credit 825
_Total receipt of credits 4,800 Total cancellation of credits 2,435
[Table continued on following page)
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Table 33. 2[Continued from preceding page] .
Total, Total, -
thousand thousand -
Indicator rubles Indicator rubles '
4. Ratios to MPS .
Receipt of Funds Payments of Funds ~
For capital investments Deductions from profits: ;
payment for production 124,196 ;
For major overhaul funds
free balance of profit 55,066
Depreciation deductions
i
Funds from income of chiefs 230
of stations directed to re-
distribution ~
i
Removal of surplus circulat- i
ing funds
~
Total ~ eceipt of funds Total payments of funds 179,492 ' ,
Balanc e 398,980 Balance 398~980
The pro fit, depreciation deductions, income from sale of property written off,
local income of stations, reduction of the norm of own circulating funds, saving on ;
major overhaul and so on are indicated in the first section--income and receipt of
funda. The income and receipts are divided in this case by types of activity
(shipments, ca~ital construction and auxiliary production). '
Capital investments, sxpenditures for increase of the norm of one's own circulating ;
funds, for major overhaul, for formation of enterprise funds and so on are pre-
sented in the second section--expenses and deductions of funds. ~
Credit ratios are reflected in the third section and relations with the superior ~
organization are reflected in the fourth section. The balance of railroads' in-
come and expenses is presented in reduced form in Table 33.2.
As can be seen from Table 33.2, income and receipts of funds comprised 394,180,000 '
rubles and expenses and deductions comprised 217,053,000 rubles, i.e., 177,127,000
rubles less.
i
The receipt of credits exceeds the sum cancelled by the railroad during the plan-
ning year by 2,365,000 rubles. As a result~the income part of the balance sheet
~is greater than the expense part by 179,492,000 rubles, which are transfe~red to ,
MPS for centralized payments and expenses.
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APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080044-2

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300084444-2
The railroads should totally cover expenses and deductions from their own income
and should also provide transfer at the established rate of funds to 1~S for cen-
tralized ~payments and expenses. Receipt of funds from MPS may ocaur only if there
- is a shortage of financing sources in the raa.lroad to fulfill the major overhaul
and capital investments plan.
COPYRIGHT: Izdatel'stvo "Transport", 1978
6521
CSO: 811t1~/o359 END ~
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FOR OFFICIAL USE ONLY ~
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APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300080044-2