Why does the Moscow metro need to raise fares?

On September 27, the GolosUA news agency hosted a press conference on the topic: "Why does the Kyiv metro need to raise fares?"

The press conference was attended by: Viktor Medved - Director of the consulting company Invest-Expert; Ivan Saliy - former mayor of Kyiv; Vyacheslav Konovalov - expert on transportation issues.

Moderator. Yuriy Gavrilechko, expert at the Public Safety Foundation.

Yuriy Havrylechko: Good afternoon, dear guests, dear colleagues! Today in the GolosUA news agency we will discuss the topic: "Why does the Kyiv subway need to raise fares?" Recently, there was information in the media that the Kyiv subway will not switch to a new payment system, but to a completely new one, and that fares will change accordingly. Yesterday, the city state administration made a statement that this information was not true and that fares would not be raised for the time being.

We invited representatives of the subway and representatives of the Kyiv City State Administration to our press conference. But we did not receive a response from the subway whether they would come or not, and the Kyiv City Administration replied that since they had denied the information about the price increase, they did not see any subject for discussion. When they raise the prices, we will talk, but for now there is nothing to talk about. Nevertheless, we see that the situation not only with the subway, but in Ukraine in general, leads to the fact that prices are rising, despite zero inflation, constantly and for everything. And so our press conference will take place before the prices for something go up. And we will be able to see whether the experts' predictions have come true or not, I think, either at the end of this year or at the beginning of next year. I would like to give the floor to Ivan Saliy, former mayor of Kyiv.

Ivan Saliy: Dear friends, transportation and subway fares are, first and foremost, a political decision. A political decision of the central government or local authorities, in agreement with the central government. In other words, the Kyiv City State Administration and the Kyiv City Council actually determine the tariffs. I would just like to emphasize that this is not done by the subway, it is not within their competence.

What are the principles of tariff setting? In all European capitals, including Moscow, fares are subsidized by the state by at least fifty percent, and in Paris by the state and the municipality. All the time, transportation is subsidized by about fifty percent. Therefore, we need to clearly realize that if there are such conversations, then something bad is happening in our city.

But since the tariff is political in nature, and elections never take place in Kyiv, we are always trying to do this. I hope that by 2015, perhaps, the tariffs will not change, but there is another problem: is safety guaranteed when tariffs in the subway are raised? Will the subway itself be able to operate if we don't change the situation?

I have to say that the authorities are not conducting an honest dialog with Kyiv residents and passengers, and in eight months the Kyiv city budget has been disproportionately executed, fulfilled by only 51.8 percent. That is, the revenue part of the city budget, which should be there in six months, has been received only in eight months. In other words, there is actually a serious lag in filling the revenue side of the budget by more than two billion. So at least once tell me on TV or in the newspapers that it was not me who was getting this information and analyzing what is going on.

Therefore, the problem is not with the subway, the problem is that the city does not finance almost all items today. But the biggest problem is that there are no corresponding revenues for all revenue items. Then this is a question about the effectiveness of the Kyiv authorities, if we take the long view. So the question arises. I know for a fact that in the first eight months of this year, the Kyiv Metro received perhaps a little more than half of what it should have received to operate. That is, responsible people work there, they are patriots, they do not always work for a salary, but they cannot put cars on the line that cannot be operated. And we are always on the verge of reducing the number of trains, because we also need to pay for electricity.

We say that inflation is not rising. However, electricity tariffs are rising on a quarterly basis, if not monthly, and payments to the subway are increasing. So the fact that we are even holding the situation with tariffs is only one point, but the fact that we are politically unable to explain this to people or effectively allow them not to be covered by the budget is another.

So I would like to emphasize that the city is facing a serious challenge, preparing for the winter, according to our information, all these breaks and all the networks are no longer on the balance sheet of Kyivenergo, but on the balance sheet of the Kyiv administration and the Kyiv City Hall, and there is a debt for repairs of more than a billion hryvnias. "Yesterday, Kyiv Vodokanal announced that they also have debts. How can you prepare for winter with debts? The responsible ones are those structures that do not take out loans, and you have to pay interest on loans. And so the city is just suffering, getting into such a difficult situation. And I believe that for a long time they have wanted to raise tariffs, and this new price formula from the New Year, of course, provides for an increase. But this will not solve anything fundamentally, because urban transportation is a function, a social mission and a service of the government, and it should be funded by the city and the state.

The state, by the way, speaking of the state, no matter what it is and no matter how badly it treats Kyiv, but provided that the city budget received 51 percent of its revenues over eight months, and the state allocated 64 percent of grants and fifty-nine percent of subventions. That is, the state is still better at financing, say, its obligations, although it is also lagging behind than, say, the city of Kyiv. So let's think about what's going on in our capital and ask the Kyiv authorities to attend such forums, wherever Kyivites gather, in person. Otherwise, they will hand out buckwheat during the elections, set up platforms, paint something, and then you won't see them for years. I believe that the law obliges them to do so, and we need them to provide us with truthful information.

Yuriy Havrylechko: Thank you. Victor, you have repeatedly made quite interesting calculations of how much and what it costs, particularly in transportation. But every time we are told that we need so much money for construction, so much for new railcars, and so on. But do we really need that much money? How effectively is it used? And is it possible to do more work for the same amount of money, to do it better, or do we need different funds?

Because, frankly, every time I hear about some billions of hryvnias that are needed for this, and then it turns out that there is no money, and everything more or less continues to work...

Ivan Saliy: And the subway is working...

Yuriy Havrylechko: As for the subway working, frankly, I am surprised. Listen, if you wanted to spend a billion, you were not given it, but everything continues to work, then maybe you did not need it at all.

Viktor Medved: I understand the question. So what is the key position? I would like to start with what we are discussing. We are discussing the information that the authorities have given out in one form or another about the increase in the price of the subway to five hryvnias.

Ivan Saliy:Information leakage...

Yuriy Havrylechko: A leak, because it has not been officially denied.

Viktor MedvedI think it's positive that there was such a leak, or a targeted drain. Apparently, today the authorities, judging by various statements about raising tariffs for housing and communal services and other payments, it seems to me that they are still performing this function of public consultation, but they are doing it informally. But nevertheless, they get an effective social cross-section and everything else, how people react to it.

I am sure that if this leak on the metro had not received such a negative public reaction, we might have seen an increase in metro fares quite quickly. Given the fact that these prices were actually met with a negative public reaction, we see a lot of comments on this issue that started around these news reports on the Internet, saying that the authorities are going crazy with these tariffs and so on, it is clear that the authorities have kind of put the brakes on this issue.

But as an economist, I am primarily concerned with another question: what should be the objective price of subway travel? According to various expert estimates, the fare ranges from one hryvnia to three hryvnias. And three hryvnias are the official statements of the KSCA employees that three hryvnias - 3.05 hryvnias is a reasonable price as of the beginning of this year. Even if we index it to the increase in production costs, it should be 10-15 kopecks more.

But the question is... Right now we have sent a request to the subway and the Kyiv City State Administration regarding the structure of tariff formation, but unfortunately, we have not received a response within the prescribed five days, so we are waiting. If we receive such information, we will publish it accordingly. In the meantime, there are no grounds to talk about the fare in detail. In principle, this is also a negative, because such information that is of public interest should be public, and tariff setting should be public. The main revenues and expenses of the subway should be public. I think that transparency in these matters will directly increase the efficiency of the subway.

Now the question of the cost of transportation. One of the key cost issues is, of course, the issue of electricity. And we see that in our country, the price of electricity is constantly rising, while we have sufficient electricity generation capacity, we have an excess of electricity, and we used to export it. Now we are not exporting it, we are basically burning through the resources we have and not using them efficiently. The policy of a normal state is always aimed at import substitution, this is our balance of payments, this is the exchange rate, this is jobs, and so on. And I consider the issue of the metro primarily from the point of view of a large consumer of electricity, which actually serves as an import substitute for the fuel used to fuel ground transportation.

Therefore, the strategy of a normal state should be aimed at ensuring that if we have excess capacity within the country, if we have reserves of the cost of production of nuclear power plants, hydroelectric power plants, and so on, in terms of electricity generation, we can constantly expand the flow of subway passengers, replacing the main cost with cheap electricity. To do this, it is necessary to stimulate the development of the subway at the legislative level through appropriate electricity tariffs. This so-called price should include an appropriate amount of money that should be allocated to the renewal of fixed assets, such as cars, tracks, and so on.

There is a positive experience in the agricultural sector, where agricultural enterprises do not pay VAT, and this tax is accumulated in the accounts of enterprises and should be used to purchase fixed assets (combines, tractors, etc.). And we see that agricultural enterprises today are actually armed with agricultural machinery from the world's leading manufacturers. Therefore, the same experience should be applied here.

But we see that the authorities have a conflict of interest not directly, when energy distribution companies close to the corridors of power, whose owners are very close to people who influence the authorities, are not interested in their consumers paying less. They are interested in increasing their profits, and accordingly, they are interested in raising tariffs, finding reasons for this, and so on.

But we, as consumers, should certainly pay for metro services, which means that passengers should pay for their excess profits. Therefore, the question today is that, of course, given the difficult financial situation in the Kyiv City State Administration with the local budget, raising metro fares will have a short-term economic positive effect. But only short-term. In the long run, it will only bring losses for the state as a whole. Why? Because we are pushing people out of the subway and onto the streets, and they are using other alternative transport, and the price of this transport is formed primarily by the cost of fuel, and we import fuel from abroad. So we get an inverse effect.

That is why we see that today, in principle, the authorities are not working on long-term strategic projects to upgrade the technological equipment of the subway and solve strategic urban problems, but rather on situational ones. They need to make a profit in the short term, and they do. But no one has calculated the effect. So, they raise the fare to five hryvnias, but no one has calculated how many fewer people will use the subway. There is such a thing as the elasticity of supply and demand. With a certain increase in the price, there is a sharp drop in consumption. So we can get the opposite effect.

And Ukrtelecom has already gone through this, when they raised prices, and at a certain point the number of consumers began to fall sharply, people began to abandon landlines in favor of mobile communications, because there is a thirty-hryvnia monthly fee and a thirty-hryvnia monthly mobile fee, and people were more interested in that. And we saw that Ukrtelecom's performance fell, and the company was on the verge of bankruptcy. So, of course, you can do the same for ten hryvnias to pay for a subway ticket. Situationally, it will be a super-profitable enterprise for a month, two or three, but in general, you can ruin the subway completely.

Yuriy Havrylechko: Excuse me. So, in essence, the situation is similar to the way the price of rail transportation was raised. And now we see that it is cheaper to travel by bus than by train, which is really fantastic. In fact, there is no such thing in any other country in the world, everywhere else transportation is more expensive, but for some reason it is cheaper in our country.

Viktor MedvedSo I would like to emphasize here that if we take the example of rail transport, we have not yet understood the cost of subway services. But in the case of railway transportation, a normal businessman is always looking for reserves, there is one option - to raise the price, and the other - to reduce the cost of the service. The issue of passenger transportation is a key one: there are two types of transportation, the main two types being electric locomotives and diesel locomotives. The cost of transportation is four times more expensive on diesel locomotives, which use diesel instead of electricity. At the same time, we have only 45 percent of our railways covered by power grids. The normal global standard is 55-60 percent.

In other words, the issue of electrification is relevant for the railways, as it will have a direct economic effect, i.e. a 3.4-4 times reduction in the cost of transportation. In general, with up to sixty-five percent electrification, we can reduce tariffs for all types of rail transportation by about 10-15 percent, rather than raise them. The question is: what are the authorities doing? By the authorities, I mean the railroad management and the Cabinet of Ministers, which approves these programs. There are two methods: to improve efficiency by attracting resources and reducing costs, or simply to raise ticket prices. Raising the price is always more interesting, you don't need to think, you don't need to develop any strategic actions, plans, and so on.

That is why today we see that economic management in our country is very weak, in the area of managing state property and property of state-owned companies, which only leads to the obsolescence of fixed assets, and this leads to an increase in production costs. In other words, the quality is deteriorating, but the price is rising.

Yuriy Havrylechko: Thank you. Vyacheslav, but nevertheless, despite the fact that the Kyiv City State Administration said they were not going to raise anything, we see that at the moment in many neighboring countries, which we often take an example from, not only European countries, but also from the East, the system of tariff formation is somewhat different than in Ukraine. The Moscow Metro has long ago switched to a mixed system depending on the number of trips, and now they are thinking about the number of kilometers and the number of stations. What can be applied here?

And in general, how effective is it, given the rather low branching of even the Kyiv metro, since we have about fifty stations, and in general, there are unlikely to be many more in the near future, does it make sense to switch to some other ways of forming tariffs? Will it have any effect? And to what extent can the administration of such a system offset the effect of introducing such differentiated tariffs?

Vyacheslav KonovalovYou have to understand that there is a classic rule in world practice that if the length of a subway is more than forty kilometers, a fixed fare does not justify itself. That is, there should either be a mixed fare or there should be payment by zone, by time spent in the subway. This is simply a classic of the global railroad economy, or rather of the urban subway, so to speak. Our subway is more than sixty kilometers long, which means that Ukraine needs to start thinking about how to differentiate it.

Because if you raise the fare seriously, as we have just been scared that the fare will be three or five hryvnias, it was done on purpose so that everyone would see that three, four or five hryvnias is a horror! And then they will raise the fare to 2.5 or three hryvnias, relatively speaking, and everyone will relax. Everyone will applaud. It's a classic scare game, so to speak.

Ivan Saliy"It's like Omelchenko used to do with minibuses.

Vyacheslav Konovalov: Yes, there is a classic scare game going on. Another issue is that we are already trying to experiment with this option of 75 minutes in the subway, which is absolutely wrong to pay for 75 minutes. As for me, this is not enough for Kyiv's realities. I mean, at least there should be some kind of daily pass, or at least a two- or three-hour fee.

Another question is what the city will get from all these increases in the subway. Even if we assume the cost of 3.5 hryvnias, the effect will be about 250-350 million hryvnias in a year. What can this be spent on? The cost of building a meter to Troyeshchyna was said to be 14 billion. That means it's out of the question. The next point is the renewal of rolling stock? Kyiv is actually participating in the Kyostok project, a loan from a Japanese bank, and is actually getting it for free, where it is upgrading several hundred subway cars using Japanese technology for some symbolic money.

Another question is how much Kyiv really needs it, but it gets it anyway. That is, the cars will not be purchased, and there will not be enough money for a new subway line. In other words, the effect is really some kind of situational, incomprehensible effect that will only anger the population. From my point of view, this is true. If only they had taken a more serious look at options for discounts on the number of trips, the so-called Kyiv resident card. Let's say I'm a Kyiv resident and I need to go somewhere every day, and if I pay a large sum of money once, I will get a serious discount. So, in principle, this would be the right concept. Another question is how it is solved, how it is done.

Again, the next point is about the efficiency of the use of funds. They built, for example, the VDNKh station, they built the Krasny Khutor station - a "stop for whites," as it is called. A stop in the middle of the forest. Who needs it? "VDNKh was built, but I get out of the subway in an almost open field, and to get to VDNKh itself, I have to go down one passage, cross another, and only then do I get to its territory. But they allegedly saved a hundred million hryvnias, although if you look at the costs, those hundred million are not there, they have already been directed somewhere else. In other words, there were no savings, but only inconvenience. That's it, in a nutshell.

Ivan Saliy:If I may add?

Yuriy Havrylechko: Please.

Ivan SaliyDear participants, first of all, if I am not surprised, I would like to express my appreciation to our speakers, they are so knowledgeable. I think that those who are interested in these topics do not always analyze this matter so deeply, they make political decisions without such well-founded statements. You do not work in state administrations. So I congratulate you.

A few comments. First, we need to realize that before the war Madrid had three million people, and after the war, just like Kyiv, Madrid was destroyed. Today, Madrid has three hundred or more metro stations. We have fifty.

Yuriy Havrylechko: About seventy, I counted.

Ivan Saliy: There are not so many stations, but you probably don't count by station.

Yuriy Havrylechko: By station, yes.

Ivan Saliy: I mean, you know, we still have to build it and build it. There is no better mode of transportation, and strategically, in all of Alexander Pavlovich's speeches, or in all of our strategies, all of this is envisaged. Maybe we haven't realized it yet. For example, there is a project to run a rocket tram line along the Left Bank from Troyeshchyna to Osokorky. I supported this idea when it was first launched, but since the tram line was not built, it is better to build a subway.

I would like to emphasize, dear friends, that the subway is not being built for fares, it is a matter of the state budget. The fare has nothing to do with the construction, moreover. There is a special fund for this purpose - the second part of our budget, where these funds are provided, and the state should have them.

Secondly, capital investments, yes, cars, overhauls are also capital investments, they are also formed from other sources, and have nothing to do with the ticket price. Otherwise, the idea that we would build a new subway line to Troieshchyna if the fare was five hryvnias was also said simply for those who do not understand anything, because it cannot be linked to the fare. No one in other countries does this, and we cannot do it here either, and we should not do it.

Now, I would like to emphasize that this zoning, the electronic ticket, is the right direction, and the subway, in terms of technology, is working in this way. To tell you the truth, our subway is poorly funded and has old cars that use a lot of electricity, but everything else is at the level of European structures, so you know. The stations are beautiful, and our cars run so fast that people came from Toulouse to study how we do it, because their automatics do not provide such speed. So it's all there, and we shouldn't be skeptical about our subway itself.

And here are the zoning options. This was introduced in Moscow a long time ago. You have a social card of a Muscovite, it says, I can take a bath, 21 trips per month are free for anyone. And there, just like in the rest of the world, each of your trips is recorded by name. We get on the subway in Moscow, put our name down, ride 18 or 21 times, and then we pay for it. Our politicians cannot make such a decision yet, because we will again have a public outcry. So they issued the card and let you ride as much as you want.

So we will have to settle all these issues at some point. But I would like to emphasize once again that the state and the city are without money, and all other discussions aside, such as "a new bridge across the Dnipro will be built below Yuzhnyi"... You see, you have chosen the right topic, it is a concern for Kyiv residents, right? And the "new bridge below Yuzhnyi" near Koncha Zaspa has been in the master plan for thirty years, the Okruzhna Road is being extended, and the land has already been privatized there, which will be in 30-40 years. Why do they write "we"? And who needs such a headline? Come here, listen to the experts, they are young guys, maybe they know you (the officials) better, and they have no goal to make money on this.

Yuriy Havrylechko: Perhaps that is why they do not communicate with them.

Ivan Saliy: They don't communicate, and that's why the situation is like this. The state and the city budget need to have money, and it turns out that the state can still make money for the oligarchs, but not for the people. And you have to understand that if you look at the economy, the budget of Kyiv, for six months, I show this officially, the share of the Kyiv budget in the state budget, that is, if the state budget is one hundred percent, then the share of the capital is 4.6 percent. This has never happened before, because Kyiv accounts for 6.2 percent of the population.

If all cities were equal, without the functions of the capital, without our higher prices, then we should have a 7-8 percent share in the budget. But our state has presented Kyiv's budget in an absolutely unacceptable way, and the Kyiv City Council has not defended it, and the state administration with Popov cannot defend it. The capital of the gross domestic product generates eighteen percent of the state's GDP. So why is Kyiv's budget so small? Then these questions would not arise. Another thing is that the authorities are still hiding the fact that construction in the country has fallen by fifteen percent in eight months, and in Kyiv by twenty-one percent. When has it ever happened that the decline in Kyiv was greater? The same is true for industrial production. In the industrial sector, the national decline is five percent, and in Kyiv it is eight percent. Have you heard anyone discussing how to raise industrial production, how to raise construction? And then the money would go to the budget.

Our authorities are demolishing kiosks, and you keep talking about it here, and I think they've already demolished three kiosks. I will say the last thing. There is no need to demolish kiosks, when we have a radio market like in China, built on five to ten floors, in China you walk through this ten-story market and know how to give someone something, so buy it here, it doesn't work anyway, there - for grandchildren to indulge in, on the top floor buy it for yourself. And Yunost has its own high-rise, I personally studied it. On the ground floor there are rusty nails, everything that is sold on the street, and then higher and higher. So we still need to create for businessmen and people, not fight with people. And the government should facilitate business and increase economic activity.

Yuriy Havrylechko: Getting back to the topic of the press conference. You said very well that the state should provide capital construction. And the price of transportation and construction are not related.

Ivan Saliy: Unrelated, no.

Yuriy Havrylechko: But as far as money is concerned, there has been a lot of talk about how the subway can earn money besides selling tokens or tickets or whatever it is that it sells for travel. This is the advertising market, and the same kiosks, and not only those located on the territory of the subway. According to various estimates, the volume of the advertising market exceeds all possible prices for tickets or tokens by five to six times. It's very easy to calculate, and nowadays you can see such large billboards in the subway that say "Kyiv Metro carries three million people every day." What are three million people? At two hryvnias each, that's 180 million a month on average. How much will it be in a year? It's at least 1.2 billion hryvnias in a year. And that's it. This is the gross income, there will be no more.

According to various estimates, the volume of advertising brings in six to ten billion hryvnias a year. And for some reason, they do not get into the budget of the Kyiv Metro.

Vyacheslav Konovalov: No, actually, officially, for the first half of the year, 5.8 million hryvnias were received from advertising of the Kyiv subway.

Yuriy Havrylechko: This is the subway, and the advertising market is a hundred times bigger. Perhaps there are some opportunities to increase advertising rates in the subway?

Vyacheslav Konovalov: Well, because there are exclusive companies that get the exclusive right to advertise there.

Ivan SaliyLook, when Omelchenko was in office and I was twice his deputy for transport, we studied this business in Europe. The idea was to increase advertising revenues. And it was completely the business and the revenue item of the Kyiv Metro. Due to the fact that nowadays it is no longer the law, not even expediency or common sense, but schemes that work, today the Kyiv Metro, which you say should receive money from advertising, receives absolutely nothing, it is only a balance sheet holder. Of what private firms make there, it gets only fifteen percent. It used to be the other way around - the subway received all one hundred percent, and fifteen percent of that went to the state budget and the city budget. Do you understand?

Why are we not discussing this? Omelchenko was building the Troieshchyna subway, Chernovetsky continued, and now it has been stopped for two years and we cannot unblock it. What have they come up with? They are taking away the functions of the customer, and the customer is about a hundred people working in the Kyiv Metro who know the subway and how to build it, have been doing it for fifty years, and transferring it to a department structure where no one knows what it is, and billions of dollars will be passed through a structure that is not ready for this at all. And this will delay the construction again, just because of these organizational measures.

Therefore, in this case, I must honestly say that we need to look for where the money is. And the state has money, people travel by subway all the time, people go to work all the time, our people are polite and pleasant. And I would like Kyiv to respond to the state and show an example of filling the budget. Example. The budget for the land tax has been fulfilled. The annual budget for eight months has been fulfilled by thirty percent. Let them answer why thirty percent. And there were budget expectations of four billion. Do you understand? That would have been the subway.

And so it is with all the structures of the city government - no one answered where the revenue part is, and there are names there. You know, you can plant chestnuts and promise a million roses. You see, this is all a classic of our authorities - they launched a summer tram before winter. We need it right now. It's a great thing. All the newspapers write to me about it.

Yuriy Havrylechko: That is, there are sources to fill the metro budget.

Ivan Saliy: I worked in Podil for twenty years, and I know what a river tram is, and what a river fleet is, and even a sea fleet.

Yuriy Havrylechko: But let's get back to the subway. Perhaps you, dear experts, have something to add about advertising? And can it really improve the situation a bit? At least, if we are talking about capital construction, then...

Ivan Saliy: That would at least be moral satisfaction.

Yuriy Havrylechko: Well, at least that would be to raise wages for employees, which for some reason is not mentioned much when people talk about price increases. Despite the fact that prices for everything are constantly being raised, and for some reason, wages are not growing much. Maybe I'm wrong?

Viktor Medved: About advertising. Of course, the volume of advertising is enormous, the volume of this market in the metro is enormous. And, of course, I don't know about the figures you mentioned, but practice shows that when implementing global infrastructure projects, such as the construction of stadiums, when people use the stadiums, about 30-40 percent of the earnings come from related activities.

That's why today we see advertising, retail space in the subway, and other ancillary services, such as the placement of ATMs for conducting money transactions. In other words, there are a lot of auxiliary tools for generating income. To ensure that money from them does not go through corrupt schemes, as the previous speaker said, we need to make this economic activity transparent. Namely, to conduct a public inventory of this property, to count it, to make this data available on the same website of the Kyiv City State Administration, and to hold real auctions without any exclusives for the placement of commercial equipment, ATMs, advertising media, and so on.

If we do this, even according to the data that Mr. Saliy has mentioned, fifteen percent of the metro receives, and it used to be one hundred percent, we can increase this income six times. If it's five million (5.8) for the first half of the year, it turns out to be ten million for the year, multiplied by six, it turns out to be about sixty million plus. This is just us, without going into details, seeing a reserve of sixty million. I'm sure that if we do this in detail, it will bring billions to the metro.

Yuriy Havrylechko: Then you can access other data.

Viktor MedvedYes, it will be billions. I would like to return to the positive.

Ivan SaliyWe just said that it was legalized.

Viktor Medved: Yes, absolutely. And now I would like to move on to the positive aspects of the information message that was announced by the authorities. It is an electronic system. Yes, it is positive. I mean, the introduction of an electronic system is very positive, because, first of all, the biggest frauds are with free travel. How many privileged people traveled, how many did not, how many other people are not clear, using some incomprehensible passes, and the budget finances this, and we cover it.

Yuriy Havrylechko: That is, it is not clear to what extent it is funded.

Viktor Medved:Yes. That's why the introduction of this, let's say, in transport, I know for a fact that in ground transportation in the regions, the amounts of benefits that compensate carriers are two to three times too high, it's just a scheme to withdraw money from the state budget, these subsidies, benefits, and so on. Such a system can definitely be implemented in the metro, and there is nothing that can stop it. Therefore, it is definitely necessary to introduce an electronic system, install terminals, create different types of cards that can use a barcode, a magnetic code, any way to keep track of passengers electronically.

If we have such an electronic record, we will be able to calculate the profitability of this type of transport at the moment, and thanks to a large amount of data, extrapolate it to future periods, and see that when the price went up by ten kopecks, passenger traffic decreased by two percent. This is important.

Another issue is that we want a normal standard of living, so we need to introduce new technologies so that we can adequately monitor not only quantitative but also qualitative indicators. Electronic technologies make this possible. But to implement such projects, it is necessary to introduce all these systems, i.e. electronic terminals in all buses, trams, etc., so that people can feel comfortable. Today, he or she cannot come up with a card and pay anywhere, because there are no such terminals.

Vyacheslav Konovalov:And there are not enough buses like that.

Viktor MedvedYes, but again, the issue of resources and armament is considered the easiest to handle electronically. That is, when we have electronic terminals, we see that at such and such a time we have an excess of passengers, at such and such a time less, and so on. But today, without an electronic system, all this is calculated using old Soviet methods. That's why we're more likely to be late. And the possibility of introducing electronic systems makes it possible to forecast and manage cash flows, reduce all these schemes for withdrawing funds from the metro.