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Ukrzaliznytsia risks to lose $145-181 million until end of 2018

As far as possible the producers will re-orient to other types of the transport – automobile or water if they will be forced to reduce the volumes of the production and sales
16:03, 20 August 2018

Open source

Railway state monopolist “Ukrzaliznytsia” can lose $145-181 million in 2018 due to the initiative on the unification of the tariffs for the transportation of the empty freight wagons. The proper calculation was made by the analytics of “Ukrpromzovnizhexpertyza” as MinProm reported citing the document.

It notes that the implementation of the draft order of the Infrastructure Ministry “On amendments to rates used for tariffs of Tariff Collection for the transport of the freights by the railway transport within Ukraine and connected services toward the unification of the tariff policy for the transportation of the empty wagons” will mean the growth of the tariffs for the railway cargo transportation by 11%.

Related: High-speed railway between Boryspil airport – Kyiv to be finished until December 1

It will lead to the reduction of the volumes of the cargo transportation for 1,5-2 million tons in comparison with the plan and detriment of the $36-43 million per month or $145-181 million during September-December 2018.

“Ukrpromzovnizhexpertyza” emphasizes that the increase of the railway tariffs leads to the decrease of the volumes of the railway cargo transportation: growth if railway tariffs by 1% lead to the reduction of volumes of the railway cargo transportation by 0,34%.

The most vulnerable are coal and iron ore, containers, minerals and building materials (flexibility of the price is 0,4-0,5%) as the expert noted.

Related: Beskydy Railway Tunnel opened in Ukraine

“As far as possible the producers will re-orient to other types of the transport – automobile or water if they will be forced to reduce the volumes of the production and sales.”

“Ukrpromzovnizhexpertyza” reminded that the growth of the railway tariffs in 2016-2017 has already led to the reduction of the volumes of the railway cargo transportation in 2017 by 6,5 million of tons. In 2018, the negative tendency continues – the reduction is 3 million of tons.

Related: Ukrzaliznytsya triples investment in Q1 2018

At the same time, the capacity of the cargo transportation of “Ukrzaliznytsia” is 22-23% and it is without the increase in the cost of the cargo transportation for the unification of the tariffs for the transportation of the empty freight wagons. The total volume of the depreciation and gross revenue of the state companies as $1.2 billion that is enough for the proper implementation of the capital investment plan for 2018 in the sum of $971 million.

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