Vladimir Putin’s officials are scrambling to put together a financial package to rescue Russian Railways from collapse. The state firm is Russia‘s largest commercial employer, with around 700,000 employees, but is struggling to cope with crippling debts.

Sources told Reuters that all Kremlin efforts were now focused on trying “to save” the company from going bust. Russian Railways has been hit by a double whammy of plummeting income and a multi-trillion-rouble debt. The company’s debt surged to an eye-watering 3.3 trillion roubles (￡32bn) at the end of the first six months of 2025.

It has since increased to roughly 4trillion roubles (￡38bn), according to Kremlin sources. Servicing its debt has proved to be particularly challenging for the state-owned company.

Russian Railways is expected to have to pay a staggering 686billion roubles (￡7bn) in debt-servicing costs this year.

Putin’s government is weighing is weighing up several options, as it desperately seeks to find funds to bale the company out. These include charging higher freight tariffs, providing subsidies and tax breaks, as well as contributions from the National Wealth Fund.

“Russian Railways is currently taking steps to address its debt, restructure it, ease the debt burden for next year and is working with credit institutions,” said Finance Minister Anton Siluanov.

The Finance Minister added that the Kremlin might have to dip into its National Wealth Fund (NWF) to rescue the company.

Other bale out options could also include capping Russian Railways’ borrowing costs at 9% and converting roughly 400 billion roubles (￡4bn) of its debt into equity.

However, these measures have yet to be discussed officially by the Kremlin’s technocrats.

The company’s finances have taken a massive hit from an unprecedented drop in freight traffic since the start of the war in Ukraine.

Loading volumes fell 3.9% in 2022, 0.2% in 2023, 4.1% in 2024 and a further 6.7% in the first nine months of 2025.

The state firm posted a net loss of 4.4billion roubles for the January-September period, its first in five years.

Vladimir Putin’s officials are scrambling to put together a financial package to rescue Russian Railways from collapse. The state firm is Russia‘s largest commercial employer, with around 700,000 employees, but is struggling to cope with crippling debts.

Sources told Reuters that all Kremlin efforts were now focused on trying “to save” the company from going bust. Russian Railways has been hit by a double whammy of plummeting income and a multi-trillion-rouble debt. The company’s debt surged to an eye-watering 3.3 trillion roubles (￡32bn) at the end of the first six months of 2025.

It has since increased to roughly 4trillion roubles (￡38bn), according to Kremlin sources. Servicing its debt has proved to be particularly challenging for the state-owned company.

Russian Railways is expected to have to pay a staggering 686billion roubles (￡7bn) in debt-servicing costs this year.

Putin’s government is weighing is weighing up several options, as it desperately seeks to find funds to bale the company out. These include charging higher freight tariffs, providing subsidies and tax breaks, as well as contributions from the National Wealth Fund.

“Russian Railways is currently taking steps to address its debt, restructure it, ease the debt burden for next year and is working with credit institutions,” said Finance Minister Anton Siluanov.

The Finance Minister added that the Kremlin might have to dip into its National Wealth Fund (NWF) to rescue the company.

Other bale out options could also include capping Russian Railways’ borrowing costs at 9% and converting roughly 400 billion roubles (￡4bn) of its debt into equity.

However, these measures have yet to be discussed officially by the Kremlin’s technocrats.

The company’s finances have taken a massive hit from an unprecedented drop in freight traffic since the start of the war in Ukraine.

Loading volumes fell 3.9% in 2022, 0.2% in 2023, 4.1% in 2024 and a further 6.7% in the first nine months of 2025.

The state firm posted a net loss of 4.4billion roubles for the January-September period, its first in five years.