In 2025, the Ukrzaliznytsia passenger transportation financing model has virtually exhausted itself. Due to the decline in the cargo base, the company can no longer cover losses in the passenger segment through freight transportation, which creates the risk of an operating gap between income and expenses. The solution for the company is to switch to the PSO (Public Service Obligation) model, when the state or local authorities order socially significant routes and compensate for the difference between the tariff and the cost, writes the Center for Transport Strategies..

According to industry experts, freight transport volumes have dropped from 175 million tons in 2024 to 161 million tons in 2025 since the start of the full-scale invasion.. In such conditions, the traditional practice of cross-subsidization has become economically unjustified.

Meanwhile, passenger traffic is growing: in 2025, 28 million passengers were transported by long-distance trains - more than in pre-war 2021. However, the segment’s losses are also growing: more than UAH 18 billion in 2024, more than UAH 22 billion in 2025. According to forecasts, in 2026 they will amount to UAH 25 billion.

Deputy Minister of Community and Territorial Development Alexei Balesta previously noted that if the state sets socially oriented tariffs, it must compensate the carrier for the difference. At the same time, the parliamentary committee’s proposal to allocate UAH 26 billion to support the passenger sector was not taken into account in full - this year, UAH 16 billion is provided from the reserve fund.

Experts note: without systemic government support, passenger transportation will not be able to function stably. “Providing accessible transportation is a form of realizing the constitutional rights of citizens,” says Doctor of Technical Sciences Alexander Krasnoshtan.

Among the possible solutions is the transition to the PSO (Public Service Obligation) model, when the state or local authorities order socially significant routes and compensate for the difference between the tariff and the cost. According to Balesta, the corresponding experimental project is planned to be presented in the near future..

According to experts, the volume of compensation within the framework of a full-fledged PSO model could be UAH 20–40 billion per year, taking into account infrastructure losses and the need to update rolling stock.

Previously, Ukrzaliznytsia tried to initiate an increase in tariffs for freight transportation by 40% in order to cover losses from passengers. But the Ministry of Economy opposed it: they said that before raising tariffs for freight transportation, Ukrzaliznytsia must update the tariff collection, which has not been revised since 2009. " Some of the cargo will end up on the roads or simply disappear due to the shutdown of enterprises,” said the Minister of Economy.