Russian Railways’ Debt Spirals to €50 Billion, Government Orders Skyscraper Sale

In a stark illustration of Russia’s economic woes, state-owned giant Russian Railways (RZD) is grappling with a staggering debt of 50 billion euros. The financial crisis has escalated to such a degree that the government has reportedly issued an order for the company to sell a prominent skyscraper in Moscow, a clear sign of the desperate measures being taken to inject liquidity into the beleaguered enterprise.

The decline in RZD’s financial health is directly linked to the sharp slowdown in Russia’s war-torn economy. Years of conflict, international sanctions, and a general downturn have significantly impacted revenue streams for key state-owned companies. For Russian Railways, this has translated into reduced freight volumes, declining passenger numbers, and increased operational costs, all contributing to the massive debt pile.

The instruction to offload a major asset like a Moscow skyscraper underscores the severity of the situation. Such a move is often a last resort for companies facing significant financial distress and indicates the government’s urgency to stabilize the national rail operator, which is crucial for the country’s logistics and infrastructure.

This development not only highlights the precarious position of Russian Railways but also offers a broader glimpse into the challenges facing Russia’s economy as it continues to grapple with the long-term consequences of ongoing geopolitical tensions and internal economic pressures. The sale of state assets to cover operational debts could become a more common occurrence if the economic downturn persists.

Source: Original Article