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Russia: IMF Denies Demanding Break Up Of National Railways

Washington, 3 March 1998 (RFE/RL) -- The International Monetary Fund (IMF) has taken the unusual step of publicly denying news reports out of Moscow that it has demanded that Russia break up its national railway system.

An official spokesperson at IMF headquarters in Washington (unnamed, female) said the reform program for 1998 recently agreed between Russia and the fund "does not envision breaking up or privatizing the railways of Russia."

The reports, based on unidentified sources, claimed that the rail break up was one of several undisclosed conditions the IMF placed on the continuation of the long-term $10.1 billion loan it is currently drawing in quarterly payments.

They also quoted the IMF's deputy representative in Moscow, Tom Richardson, as confirming the report.

The IMF spokesperson disputed that, quoting Richardson as saying he had declined to make any comment on any reports.

An IMF team was in Moscow since early February working out the 1998 program targets for the three-year loan. IMF Managing Director Michel Camdessus traveled to the Russian capital last week to wrap-up the discussions on the 1998 program and for a general review of the country's progress. He met with a number of senior officials, including President Boris Yeltsin.

The news reports quoted unidentified Moscow rail sources as saying that Camdessus had tried to take Yeltsin by surprise by raising the rail privatization demand at their Kremlin meeting, but officials close to Camdessus deny that. The entire subject was "not (even) discussed" by the IMF chief and Yeltsin, say IMF officials.

The official IMF spokesperson says that the 1998 program does envisage increasing the transparency of railroad operations, enhancing their efficiency and improving their revenue collections.

The program involves "a number of measures aimed at reforming Russia's public utilities and transport monopolies, including the railroads," says the spokesperson.

Transparency of operations would be achieved by publicly publishing the railroads financial accounts to meet international accounting standards by the end of 1999, says the spokesperson.

Revenue collections, as part of a strategy to resolve nonpayment problems, would be improved by establishing targets for collections in cash. This would entail reducing the railway's dependence on in-kind transfers and liability trade, two forms of non-cash payment used by other state entities.

Thirdly, says the spokesperson, the national railroad would be subject to the same long-term general government reform program of divesting social assets, such as schools and clinics, to local governments, and of privatizing or selling-off ancillary enterprises and services which are not directly related to rail transport.

Russia's First Deputy Minister of Railways, Ivan Besedin, told reporters he has drafted a conceptual outline of railway reform to be discussed at a meeting of railway officials with Minister Nikolai Aksenenko later this month. But he did not outline what shape that reform would take.

Yeltsin and others have said they want to keep the railroad under a government ministry. IMF officials dealing with Russia say that rail privatization is not included in any of the programs they've worked out with Moscow over the past year or more.

They suggest that some Russian officials who are opposed to reforms may be spreading the story in an effort to stop all movement towards reforming and modernizing national railway operations.