The financial problems of Ukrzaliznytsia JSC cannot be solved by another increase in freight tariffs, because their reason lies not in the freight segment, but in the chronic unprofitability of passenger transportation. This opinion was expressed by Alexander Trokhimets, Vice President for Energy Issues of the Ukrainian National Committee of the International Chamber of Commerce (ICC Ukraine)..

According to him, freight transportation, even during the war, remains the main source of income for Ukrzaliznytsia, so another increase in tariffs will actually mean shifting the company’s financial problems to industry. This will have the greatest impact on the energy sector, since the railway remains practically no alternative way of delivering coal to thermal power plants.

“The main reason for its financial difficulties is not freight transportation, which even during the war remains the company’s key source of income, but the chronic unprofitability of the passenger segment,” Trokhimets emphasized.

The expert noted that the rise in transportation prices will increase the cost of coal delivery precisely during the period when energy enterprises are building up fuel reserves for the heating season. In addition, previous tariff increases have already led to a reduction in the cargo base: due to increased logistics costs, some cargo left the railway, and the company lost income.

According to Trokhimetz, this practice only aggravates the problem, because due to the reduction in traffic there is a need to revise tariffs again, while the structural causes of financial difficulties remain unresolved.

“The financial recovery of Ukrzaliznytsia should be based on structural changes:

increasing operational efficiency, restoring the cargo base and reforming the mechanism for financing passenger transportation in accordance with the European PSO model” (Public Service Obligation. – Ed. ), he emphasized.

We would like to remind you that earlier the All-Ukrainian Energy Assembly and the Federation of Employers of the Fuel and Energy Complex of Ukraine also called on the government to prevent an increase in tariffs for freight rail transportation. Industry organizations note that the rise in logistics costs will complicate preparations for the heating season and will not solve the systemic financial problems of Ukrzaliznytsia JSC..