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- Concrete argument: business asks to extend privilege for transportation of building materials
Concrete argument: business asks to extend privilege for transportation of building materials
The business asks the government to keep the privilege for transportation of building materials. Its cancellation in 2026 may lead to a 16% increase in the cost of this service and, as a result, will increase prices for construction, including state-owned buildings. The reduced tariff is valid until the end of 2025. The share of the cost of materials is 30-40%. Developers note that the cancellation of the relief may force them to review business plans, especially in projects with low margins, which, in turn, can cause construction delays, rising housing prices for end buyers and, in some cases, freezing projects.
Privilege for transportation of building materials
The cancellation of the privilege for the transportation of building materials in 2026 may lead to a 16% increase in the price of this service, which, in turn, will affect the cost of construction. Deputy Prime Minister Marat Khusnullin was warned about this by the largest associations of manufacturers, including the National Association of Manufacturers of Building Materials and the Construction Industry (NOPSM), Soyuzcement, the Association of Manufacturers and Consumers of Natural Building Materials "Careers of Eurasia" and the Union of Manufacturers of Dry Building Mixes.
In the document that Izvestia has, they ask for an extension of the preferential tariff for 2026, which was valid for them from 2015 to 2025. In particular, this helped to curb the growth in the cost of government construction projects.
"Currently, the industry is facing serious challenges, one of which is a systemic increase in transportation costs associated with the transportation of construction materials by rail," the document says. "The increase in railway tariffs directly infringes on the interests of domestic manufacturers and consumers of building materials, reduces their competitiveness in the domestic market and poses a threat to import substitution, which contradicts the strategic objectives of the state."
The letter also says that construction cargo and cement account for more than 11% of all Russian Railways shipments, second only to the coal and oil refining industries. And for regions with remote logistics (the Urals, Siberia, the Far East) and for the delivery of materials, rail transport remains practically the only alternative type of communication, the document emphasizes.
As the authors explain, from December 31, 2025, the FAS order dated 12/10/2015 "On the indexation of tariff rates, fees and charges for cargo transportation and infrastructure services for cargo transportation performed (provided) by Russian Railways" ends. The document established a preferential coefficient for transportation tariffs. However, now the FAS has prepared an order that establishes, from January 1, 2026, a new procedure for calculating tariffs for cargo transportation. This means that goods and materials will receive an outstripping increase in transportation costs by 16%, the authors of the appeal note.
The consequences of this include a threat to the competitiveness of domestic production. In their opinion, the increase in transportation costs will give an advantage to foreign suppliers (China, Turkey, Iran, Kazakhstan, Belarus, etc.) using active state support measures. They also believe that this will lead to an acceleration of inflation and an increase in construction costs, including government construction projects.
In this regard, the business asks Marat Khusnullin to take the initiative to prepare a new FAS order that would provide for a preferential coefficient for transportation.
The cost of building materials is one of the components of housing prices, as well as other costs, be it the cost of land, installation work, communications, etc., explained Anton Solon, one of the authors of the appeal, executive director of the NOPSM. However, according to him, production is predominantly capital—intensive and energy-intensive, manufacturers cannot influence a significant part of their costs, which are determined by preset tariffs for gas, electricity, fuel, railway services, etc.
The press service of the association reported that the share of construction products in the cost per square meter today can range from 30 to 40%. At the same time, they noted that by the end of 2025, transportation takes up about 5-8% of the cost of materials for typical housing and public buildings and up to 10-15% for material-intensive/ remote facilities, despite the fact that in road construction the contribution of transport can reach 30-50% of the estimate.
— In the early 1990s, the share of cement transportation by rail was at the level of 80%, now it has dropped below 34%. The side effects should be considered the subsequent increase in budget expenditures for construction (including for the implementation of transport projects), an additional contribution to consumer inflation and lower housing affordability," Denis Nazarov, another author of the appeal, Chairman of the Committee on Transport and Logistics of Soyuzcement, explained to Izvestia.
Izvestia sent a request to the office of Deputy Prime Minister Marat Khusnullin, as well as to the Federal Antimonopoly Service with a request to comment on the situation with the cancellation of preferential transportation.
What risks can an increase in the cost of transportation of building materials lead to?
Most of the construction industry is based on the legacy that we inherited from the Soviet Union. One of the rules of that system is to localize the production of materials within a radius of up to 300 km from the place of consumption. This ensured their cost-effective logistics and accessibility, and allowed them to be used effectively on the construction site. Changing the cost of the tariff will narrow this radius of accessibility, which may even cause a shortage of a number of building materials in those territories where there is no own production, Anton Glushkov, president of the National Association of Builders (NOSTROI), explained to Izvestia.
According to him, the industry is already going through a difficult period and any factor affecting the cost growth can negatively affect developers.
— Due to the cancellation of the lowering coefficients, manufacturers will be forced to raise the selling prices of their products to compensate for the increased transportation costs. Developers are already experiencing difficulties with maintaining current prices for housing and commercial facilities, while delays in project implementation may occur due to a shortage of cement and an increase in its cost, the industry representative explained.
He also noted that a further increase in tariffs in the absence of government support would lead to a significant increase in the cost of construction, a reduction in its volume and, as a result, to a shortage of housing and infrastructure facilities. According to Anton Glushkov, businesses are concerned about the mandatory labeling of cement, which was introduced on October 1 this year. According to him, the association carefully studied the operation of the mechanism and came to the conclusion that it carries practically nothing for the business except costs.
The development company GK Aeroplane informed Izvestia that they were aware of the increase in freight tariffs, as well as the fact that the Federal Antimonopoly Service was introducing a phased cancellation of the lowering coefficients that had previously been in effect for mineral and construction goods.
— Taking into account this increase in the cost of logistics, the cost of transportation of building materials is likely to increase. This is critical for the developer: the increase in shipping costs is included in the cost structure of construction. Industry estimates of a minimum 16% increase in transportation costs look plausible, given that the logistics chain is a significant part of the cost, especially for heavy and bulky construction materials," Alexey Akindinov, the company's chief operating officer, explained to Izvestia.
According to him, if developers cannot fully absorb these costs due to their marginality or optimization of other items, part of the costs will inevitably fall into the price of the facilities. It is also worth considering that an increase in transportation costs can increase systemic risks: developers may face a revision of business plans, especially in projects with low margins, and this may lead to delays in construction or an increase in the cost of housing for end buyers, a business representative believes.
— Reducing coefficients for the railway transportation of building materials served as a mechanism to support the industry: They made it possible to reduce transportation costs, which in the long run made projects more cost-effective. The revival of a similar benefit may help limit the growth in the final price of housing and infrastructure facilities," Alexey Akindinov emphasized, noting that if transportation costs rise sharply, developers may be forced to suspend some projects due to deteriorating profitability, which, in turn, will affect employment and demand for building materials.
According to him, support for the new regulatory measure can help mitigate cost increases, maintain industry resilience, and reduce risks to the economy and end users.
This opinion is shared by a source of Izvestia in one of the major government organizations that deals with construction.
— As a company leading large federal construction projects, the increase in the cost of transportation is a significant challenge for us. Since the spring of this year, cement has already risen in price by an average of 18%, and the increase in fuel and logistics tariffs is only increasing this pressure. We use concrete and building materials in huge volumes, so every percentage increase in the cost of delivery directly and significantly affects the final price of the project," the source said.
According to him, in this situation, the introduction of a preferential reduction coefficient for transportation would be an effective measure of state support. This would help partially offset the rising costs and maintain the stability of the cost of government construction projects, the representative of the public sector believes.
— Any cancellation of benefits increases the cost of construction. Given that demand has already fallen, starting from building materials to the sale of final objects, of course, the increase in the cost of transportation will have consequences. The industry is likely to be in a state of deep stagnation next year," says Roman Korobeikin, chairman of the construction committee of Opora Russia in the Moscow Region and CEO of Leto All Year Round, a company that sells building materials.
According to him, if an increase in prices is also imposed on this, many small manufacturers may not survive this, therefore, the proposal of building materials manufacturers to extend the benefits can be supported.
— The situation in the construction industry has been really difficult in recent years. The developers were hit by the Central Bank's rate, the harsh policy of banks, and the increasing complexity of logistics routes for all construction materials and components, as well as the outflow of workers," Vladimir Komlev, member of the General Council of Delovaya Rossiya and managing partner of Bildservice, explained to Izvestia.
In his opinion, the business's proposal to extend preferential transportation will objectively reduce the final cost of facilities under construction, using legitimate methods to reduce costs without harming the economy.
— Will it be critical for the industry to cancel the privilege for building materials for railway transportation? We are talking about a significant proportion of materials in the composition, for example, of an apartment building — cement, inert, dry mixes, insulation materials, etc. The transport component in their price is about 12%," said Maxim Fedorchenko, President of the Association of Construction Organizations of the Novosibirsk Region.
According to him, additional costs exceeding inflation are not included in the parameters of project financing, which means that developers and precast concrete plants will have to look for a way out. For example, you can risk making a replacement for not always high-quality analogues from foreign manufacturers, or switch to less convenient trucking, which strongly depend on both road quality and seasonal restrictions.
Georgy Ostapkovich, director of the HSE Center for Market Research, believes that the authorities are unlikely to meet business halfway, since benefits are being canceled not only for manufacturers of building materials, but also for other industries. According to him, given that Russia has adopted a deficit budget for three years, no one will single out a separate industry. In addition, he noted that the state constantly supports Russian Railways, as the company is currently in the red in terms of profits.
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