Railroads are the dominant mode of transportation. In 1995 Russia had some 154,000 kilometers of railroads, 26 percent of which were electrified, but 67,000 kilometers of that total served specific industries and were not available for general use (see fig. 11). The entire system is 1.52-meter gauge. In 1993 railroads accounted for 1,608 billion ton-kilometers of cargo traffic, compared with the 26 billion ton-kilometers provided by trucks. The prominence of railroads is the result of several factors: the vast distances that need to be covered; the penchant of Soviet economic planners for locating manufacturing facilities in politically expedient areas rather than where raw materials and other inputs were available; and the conditions for granting state fuel subsidies, which provided no incentives to break up cargo transportation into shorter-haul operations that could be covered by road. Cargo traffic is the predominant use of railroads, in contrast to the emphasis on passenger traffic in West European railroad systems (see table 19; table 20, Appendix). This pattern is a product of the Soviet emphasis on heavy industry and production rather than on consumers. In 1992 Russia's railroads accounted for 253,000 passenger-kilometers, and by 1994 the total had dropped to 227,000 passenger-kilometers.
Railroad traffic has plummeted since the beginning of Russian economic reform, reflecting a general decline in economic activity. Between 1992 and 1994, freight haulage dropped from 1.9 million ton-kilometers to 1.2 million ton-kilometers, and Russia's rolling stock and roadbeds deteriorated, mainly because of insufficient maintenance funding. In 1993 an estimated 8.5 percent of Russian rail lines were defective. As a market economy takes shape, experts forecast a smaller relative role for the railroads. The combination of fuel and material costs, substantially higher in the absence of government subsidies, and new alternative routing will likely prompt Russian manufacturers to find more efficient means of transporting goods. For shorter hauls, trucks will replace rail service, and intermodal transportation will receive greater emphasis as an outgrowth of marketization.