Oligarchs fight for control of Russian railway

TWO of Russia’s most powerful oligarchs are set to compete with each other in a multi-billion dollar auction for state-owned rail group Freight One, which goes up for sale at the end of this month.

Steel magnate Vladimir Lisin, Russia’s richest man with a $24bn fortune, will bid for the Russian Railways unit via his transport arm Universal Cargo Logistics Holding (UCLH), a spokesman for UCLH said yesterday.

The spokesman added he expected the biggest threat to Lisin’s success to come from mining supply group Transoil, controlled by Gennady Timchenko, a billionaire oil trader and longtime associate of Prime Minister Vladimir Putin.

The battle for control of Freight One was reduced to a likely straight battle between the two oligarchs after Globaltrans, the only publicly listed contender, pulled out of the race last week.

Globaltrans, which like Transoil is part-owned by transport holding company N-Trans, said it would pull out of the auction due to volatile global financial conditions – despite having secured financing.

Russian Railways has been preparing the sale of around 75 per cent of Freight One as part of a long-term plan to raise cash for new infrastructure.