The Cabinet of Ministers is asked to impose a moratorium on tariff increases at Ukrzaliznytsia
23 December 20:37
The 37% increase in freight transportation tariffs proposed by Ukrzaliznytsia will have catastrophic consequences for the economy, leading to the shutdown of strategic enterprises and a reduction in foreign exchange earnings. This is stated in a letter from Ukrmetallurgprom (UMP) to Prime Minister Denys Shmyhal and Vice Prime Minister for the Restoration of Ukraine to Minister of Community and Territorial Development of Ukraine Oleksiy Kuleba, [Komersant] reports.
The letter states that, given the state of the domestic industry, the government should impose a two-year moratorium on raising Ukrzaliznytsia’s tariffs and conduct an audit of the state-owned company to eliminate the causes of uncontrolled cost increases.
In the UMP’s letter to the Prime Minister and the Minister of Community and Territorial Development, its authors also expressed concern over the decision made by Ukrzaliznytsia without involving the business community and noted that the economic consequences would be catastrophic and lead to the closure of strategic enterprises and a significant reduction in foreign exchange earnings.
The UMP emphasized that the railroad is the main means of freight transportation in Ukraine, accounting for almost 82% of freight and 36% of passenger traffic. And raising tariffs will not solve the problems of Ukrzaliznytsia unless the company’s structure is reformed, internal resources are used and the expenditure policy is urgently revised.
The metallurgists called on the Government to take measures to improve the financial condition of Ukrzaliznytsia by developing the freight base, optimizing costs and increasing the efficiency of the state monopoly’s assets. In addition, they demanded a moratorium on raising tariffs for rail freight transportation until the end of the state of war and for at least two years after the end of hostilities.
As a reminder, the largest state-owned monopolies – Ukrzaliznytsia, GTS Operator of Ukraine, and Ukrenergo – plan to raise tariffs in 2025. The reasons for the increase vary, but questions remain about the transparency of tariff calculation.
The National Energy and Utilities Regulatory Commission (NEURC) approved a 26% increase in Ukrenergo’s electricity transmission tariff and a fourfold increase in the GTS Operator’s gas transportation tariff. The management of Ukrzaliznytsia initiated a 37% increase in freight transportation tariffs.
