Cost optimisation measures
In 2016, costs savings achieved through the implementation of FPC’s medium-term Stabilisation Programme, approved by the Board of Directors on 27 April 2015, totalled RUB 6.3 billion against the planned RUB 5.2 billion, a remarkable 21.2% over-achievement.
| Activities | 2016 | |||
|---|---|---|---|---|
| Plan | Actual | +/– | % | |
| Reduction of rolling stock maintenance and repair costs | 1.4 | 1.8 | 0.4 | 130.6 |
| Optimisation of train-kilometre performance | 2.6 | 2.6 | 0.0 | 100.0 |
| Reduction of costs for maintenance and repair of buildings, structures and equipment | 0.6 | 0.7 | 0.1 | 126.8 |
| Mothballing of fixed assets | 0.1 | 0.6 | 0.5 | 579.6 |
| Rightsizing to match performed tasks | 0.6 | 0.6 | 0.05 | 108.7 |
| Total | 5.2 | 6.3 | 1.1 | 121.2 |
In addition to the Stabilisation Programme, which was taken into consideration in the cost budgeting process1, to reduce operating expenses by 10% JSC FPC’s Programme for the Reduction of Scope and Costs of Consumed Services in 2016 and the Programme of Additional Measures, were both approved by FPC’s Board of Directors on 7 October 2016 (Minutes No. 5).
The actual savings achieved under the programmes over the year totalled RUB 3.3 billion, or 105.0% of the target.
1 Pursuant to Russian Government Directive No. 4750p-P13 dated 4 July 2016; paragraph 4 of Section II of the minutes of the 18 January 2016 Meeting at the Office of the Russian Prime Minister; and instruction of the Russian Government No. ISh-P13-2047 dated 11 April 2016.
| Activities | Plan | Actual | +/– | % |
|---|---|---|---|---|
| Organisational structure optimisation | 0.07 | 0.1 | 0.03 | 144.7 |
| Working with suppliers and contractors to achieve lower cost inflation for goods and services, and reduce the scope of consumed services | 3.1 | 3.2 | 0.07 | 103.2 |
| Total for activities | 3.2 | 3.3 | 0.1 | 105.0 |