And you, gross: how to develop public transport in Russian cities
At the end of September, public transport flights were reduced in several Russian regions due to debts: morning trams were canceled in Osinniki, Kemerovo Region, and trains to regional centers were stopped in Ulyanovsk. Several bus routes from Novosibirsk to Kuzbass were also stopped. The story as a whole is not so rare: problems with public transport due to debts arise constantly in different regions of the Russian Federation. However, they usually have a solution, and it lies not only in the plane of increasing fares for passengers and subsidizing the industry. Izvestia figured out how to solve such difficulties and who should pay for buses to run without interruptions.
Why is public transport being cancelled?
All morning tram services in Osinniki on September 30 were canceled indefinitely because the Municipal Unitary Enterprise "Electric Transport" owed for electricity. At the same time, the media noted that local residents had repeatedly stated about the "depressing state" of this transport in the city and a strong reduction in its number on routes.
The Osinnikov administration told Izvestia that tram traffic is already operating normally, and "complete duplication of tram tracks by bus routes" is operating on regular public transport routes. Questions about financing the industry and solving debt problems were not answered.
A day earlier, the Novosibirsk Region reported the cancellation of several passenger bus flights from Novosibirsk to the Kemerovo Region: Kuzbasspassazhirautotrans owes carriers from the neighboring region about 100 million rubles. It is claimed that the money that this company receives goes to "holes in the budget" of the company, and not to cover debts. These problems have been dragging on since 2024.
Izvestia sent a request to the Ministry of Transport of the Kemerovo region. No response had been received at the time of publication.
Another problematic region of recent days is the Ulyanovsk region. There, the Bashkortostan Suburban Passenger Company announced the cancellation of a number of suburban trains from Ulyanovsk to Inza, Maina and Dimitrovgrad. Some of them are seasonal "summer cottages", but mostly regular flights have stopped working. The reason is the large debt owed by the regional Ministry of Transport to the carrier "due to budget underfunding for rail transportation."
In local media, the transport department explained the situation "by the current budget deficit, the growth of accounts payable to the carrier and the lack of the possibility of allocating additional financing to subsidize it." Izvestia also sent a request to the Ministry of Transport of the region. No response had been received at the time of publication.
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At the same time, last year, the Minister of Transport of the Ulyanovsk Region, Evgeny Lazarev, said that in 2026, 483.7 million rubles were budgeted for the industry, with a demand of more than 1.5 billion. As of January 1, 2026, the region's accounts payable for rail transportation amounted to 250 million rubles, 46.2 million for the settlement agreement on suburban rail transportation. Another 77.2 million is a deficit in air transportation.
The situation in these three regions is not unique — problems with public transport due to large debts arise regularly. At the end of 2025, the Makhachkala administration completely liquidated the Municipal Unitary Enterprise Makhachkala Trolleybus Administration due to debts of about 266 million rubles. The mayor of the city, Dzhambulat Salavov, explained that he did not see the point in maintaining trolleybuses, because "the future belongs to electric buses."
Should transportation be profitable
They often try to explain the problems of public transport with low fares and see a solution in increasing tolls: for example, in Kamensk-Uralsky in the Sverdlovsk region in January 2025, one of the carriers increased the cost, explaining that it was necessary to pay off salary arrears to employees. However, experts emphasize that public transport should not be self-supporting.
— Even in London, Vienna and Berlin, the share of revenue in covering costs rarely exceeds 50-60%. Public transport is part of the backbone of the urban system, ensuring the availability of jobs and services, so its basic logic is not profit, but accessibility as a public good," said Stanislav Guzhov, an expert at the Presidential Academy.
The gap between the cost of operating transport on routes and the revenue from the fare is usually subsidized, said Pavel Zyuzin, director of the Center for Transport Planning at the Institute of Transport of the Higher School of Economics. There are rare exceptions: for example, in Singapore, transport companies can be profitable, but also not at the expense of the ticket price — the company can own real estate and use its rental as a tool to capitalize.
— Under normal conditions, the economically justified fare should be about twice as high as the one actually practiced on the route — the fare costs 40 rubles, and the economically justified fare should be 95 rubles, — the source explained.
At the same time, the unprofitability of public transport does not mean that the city only incurs budget losses: on the contrary, people who use a well-developed route network create added value in other sectors of the economy.
Where do debts come from
Viktor Ageev, First Deputy General Director of the Institute of Urban Economics Foundation, Director of Urban Planning and Real Estate, explained the situation with the cancellation of public transport in different regions due to debts as a result of "accumulated systemic deformations in the organization and financing of public transport."
"The first and perhaps the key reason is chronic underfunding, in which regions have been holding back fare increases for years without fully compensating carriers for lost revenue," he explained. — Debts for electricity, fuel and related operators are a direct consequence of this gap: the fare for passengers remains socially acceptable, but no one covers the economically justified difference.
According to the expert, the suboptimal route network deserves special mention, which in many Russian cities "developed spontaneously, under the influence of private carriers and without a single transport planning."
Pavel Zyuzin cited the same Aspen Hills as an example: about 50,000 residents live there and a tram system operates, but instead of financing and developing it, parallel functioning public transport systems were created in this city (as in a number of others), which began to take passengers away from the main network and increase its unprofitability.
Vladivostok also faced this problem at the time: the dismantling of tram and trolleybus lines in the late 2000s and early 2010s led to "severe consequences": excessive motorization and, as a result, huge overruns, the complete impossibility of planning a working day due to the search for parking, etc.
The method of calculating an economically reasonable tariff also leads to an increase in debts, Stanislav Guzhov added. It is formed based on the budgetary possibilities of the region, rather than the actual cost, which puts a loss in the contract in advance.
At the same time, as Viktor Ageev noted, tenders in these conditions are often won by carriers who have offered the lowest price to the detriment of quality. Such dumping leads to deterioration of the fleet, savings on repairs and personnel, and ultimately to a deterioration in transport services.
Structurally, the problem, according to Stanislav Guzhov, is reinforced by the dominance of "clean contracts", in which the carrier assumes the risk of passenger traffic without having leverage over the tariff or route network, and is forced to lend the system with its own funds. As a result, stopping flights becomes an extreme measure when the debt level is critical.
— The transition to gross contracts, in which the risk of income is borne by the customer, reduces the likelihood of such disruptions, — said the expert.
How to organize the work of public transport
Large cities are already increasingly switching to gross contracts, experts noted. Under this system, the region or municipality enters into a contract with the carrier for flights, pays for its work after the fact and according to the established standard, and collects the proceeds from ticket sales itself, Viktor Ageev explained. Gross contracts fundamentally change the distribution of risks: the carrier is no longer dependent on fluctuations in passenger traffic, it ceases to be hostage to cash gaps and can plan its activities, and the customer receives tools to manage the route network, schedule and quality.
The gross contract is a rather expensive model of transportation organization, but it is also the most promising, Pavel Zyuzin emphasized. In this case, the entire responsibility for planning and financing lies with the transportation organizer: regional or municipal authorities that hire carriers in a wide market.
— Large companies work here, which come to municipal routes in different regions and clear the marshrutchik market. But for now, there are archaic practices with unregulated fares, when minibuses collect their own fares, and the transportation organizer or regional authorities do not interfere in this at all," the Izvestia interlocutor admitted.
He added that a very successful contracting system has been established in Perm, Chelyabinsk, Bryansk, Volgograd, Yuzhno-Sakhalinsk and a number of other cities.
Viktor Ageev called life cycle contracts the second working model, in which the carrier is responsible not only for transportation, but also for the condition of the fleet, its maintenance and repair for 10-15 years, receiving a fixed fee for this. This approach encourages the operator to invest in renewal and quality, rather than working "hard", and is implemented, for example, in the tram concessions of St. Petersburg, Krasnodar and Nizhny Novgorod.
In general, it is important to link federal investment support for public transport more closely with a long-term plan for its operation, confirmed Alexey Radchenko, an expert on urban and transport planning and urbanist. According to him, the region, receiving money for equipment or infrastructure, should simultaneously show which sources will finance transport work in the coming years. Currently, responsibility for it largely remains at the regional and municipal levels, but this is risky for financially weak territories.
And subsidies for fleet renewal, preferential leasing through GTLC and concessions, as Stanislav Guzhov clarified, do not affect operating costs, which only increases the financial burden on the region and creates an "empty wagon effect."
At the same time, at the State Council, Russian President Vladimir Putin announced a new paradigm in which subsidies can be spent not only on updating the rolling stock fleet, but also on infrastructure solutions: rails, dedicated tracks, etc., Pavel Zyuzin recalled.
— This is extremely important. You can look at the unfortunate example of Tver: instead of repairing the tram network, they acquired new rolling stock. All this stood in the depot and was subsequently either disposed of or sold to other cities, and the tram system was closed," the source told Izvestia.
He stressed that investments are required in the infrastructure of the trolleybus network, and in the network of electric buses, and even in the bus system — for the efficiency of the latter, specially constructed stops, dedicated lanes and final stops are critically important.
We can also pay attention to foreign approaches, Alexey Radchenko added. For example, in France there is a special transport fee from employers; in Switzerland, regional transportation is jointly ordered and funded by the federal level and the cantons if passenger revenue is not enough to cover the cost of the service.
It is also necessary to review electricity tariffs for urban electric transport enterprises, Ilya Zotov, chairman of the All-Russian Association of Passengers, added.
— Now the price of services is actually commercial, although this should not be the case, since public transport performs an important social function — it ensures the mobility of citizens, — said the interlocutor of Izvestia.
In his opinion, the most effective tool may be the fund for the development of public transport at the regional level, where funds from parking lots, fines for traffic violations and other sources will accumulate. Ilya Zotov proposed making the foundation's money "colored" (funds that are legally allowed to be spent strictly for certain purposes) in order to ensure their intended use for the functioning of public transport.
As for inter—municipal routes, Pavel Zyuzin believes that the latest decisions of the State Council regarding the development of a guaranteeing carrier, a company that can temporarily perform compensatory work on the canceled route in the event of the carrier's departure, can help.
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