Russian Railways (RZhD) is busy laying the long-term groundwork for an IPO, planned for 2010. A development strategy, which chief Vladimir Yakunin says is crucial for investment, is awaiting approval. The company is chasing $US 50 billion by 2010.

It means the company will need significant funding, with spinning off assets and privatising them being a key step.
 
Newly-formed subsidiaries have already started the show before the anticipated 2010 IPO.
 
The First Cargo Company which began operating at the end of 2007, and RefService which transports refrigerated goods, will be coming to market as soon as they've shown they are on their feet.

“Firstly they should fulfil the full year of operations. I suppose as far as RefService is concerned, it will be [shares will be on sale] this year and for the First Cargo Company it will be next year,” Yakunin said.

Another unit of RZhD, TransContainer – Russia's biggest rail container operator – is already traded in Russia, and may be also listed in London.

“We decided to have a private placement firstly in Russia and we cannot exclude the possibility of going onto London Exchange,” Yakunin added.

Experts say TransContainer could be an attractive investment proposition for investors.
 
As Russian Railways operates one of the world's largest rail networks, extending across eleven time zones, the reform process will take some time. 

But in order to overhaul its network and modernise its operating system, RZhD's need for capital is immense. 
 
The setting up and privatisation of its subunits is a means to enable both goals to be met.