Would Kyiv announce increase of public transport fares?

Author : Olena Holubeva

Source : 112 Ukraine

According to Kyivpastrans calculations, the economically justified tariff for land transport (tram, trolleybus, bus) is 0,91 USD per passenger and 2,9 USD for travel on a city train
10:51, 18 May 2021

112 Agency

The Kyiv metro and Kyivpastrans demand from the Kyiv council to allocate subsidies for enterprises or to raise tariffs for transportation. In their appeal to the MPs, the enterprises cite shocking figures: the economically justified cost of transporting one passenger in the Kyiv metro is 0,73 USD, and the economically justified tariff for 2021 is 0,74 USD. According to Kyivpastrans calculations, the economically justified tariff for land transport (tram, trolleybus, bus) is 0,91 USD per passenger and 2,9 USD for travel on a city train. The existing tariffs of 0,3 USD have exhausted themselves and create colossal debts to the enterprise, the appeal says.

In parallel, the trade union of transport workers, workers of the "Kyiv Metro" and "Kyivpastrans" held a meeting under the walls of the Kyiv City Council.

The given figures of the cost of transportation are indicated in the financial plans of municipal enterprises, which have already been transferred to the Kyiv City State Administration, Deputy Head of the Kyiv Metro Natalya Makogon told According to her, the financial plan of the Kyiv metro will be unified with the financial plan of Kyivpastrans. Both documents have already been submitted to the administration. They provide the current cost of travel and indicate the amount of funds required for the full functioning of the urban transport infrastructure.

Calculating and approving tariffs is the exclusive competence of the Kyiv City State Administration. The administration must issue an appropriate order, stressed Natalya Makogon. “We cannot talk about tariffs or offer them, we can only talk about the cost price. Today the cost price of a trip in the Kyiv metro is 0,73 USD,” she recalled.

Kyiv Mayor Vitali Klitschko called more moderate figures for the cost of transportation. According to him, the "terrible figure" is 0,54 USD. In order for transport to go to zero, 80 million USD is transferred from the Kyiv budget annually, Klitschko said.

Raise tariffs or knock compensation out of the state budget?

What is important: the Kyiv City State Administration has already made it clear that changing the tariff for transportation in Kiev is not the issue that will be decided today or tomorrow. Commenting on the resonance of the day, the first deputy head of the Kyiv City State Administration Mykola Povoroznik on his Facebook page outlined the stages that precede the real change in the cost of travel: after the utilities submit an economically justified tariff, the Department of Transport Infrastructure studies it and prepares the corresponding package of documents regarding the change in the cost of transportation in public utilities... The next stage – the specialists of the Department of Economics and Investments consider the economic justification of the tariff and carry out the appropriate calculations - what it should be. The order to change the tariff must go through a public hearing procedure and register with the Ministry of Justice.

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It takes time for "proper procedures and calculations". Procedures and calculations are a reliable tool with the help of which officials can “freeze” from a problem that is sensitive to political ratings for as long as they want.

The Kyiv authorities are in a difficult situation and therefore, as they can avoid a direct answer to the question of what is their position on the need to increase the cost of travel. sent a request to the press service of the Kyiv City State Administration, but they made it clear that it was hardly possible to count on the fact that the answer to it would contain "the position of the city leaders on the need to increase the cost of travel." The answer, which is preparing the publication, will focus on legal procedures and mechanisms.

The fact is that the question of the deplorable financial condition of the city's transport enterprises is being actively discussed against the backdrop of a series of searches at public utilities. The prosecutor's office and tax authorities have been conducting searches in structures subordinate to the Kyiv City State Administration since May 11. The State Fiscal Service yesterday announced the start of criminal proceedings on the fact of deliberate tax evasion during the construction of the Syretsko-Pechersk metro line in the amount of more than 327,000 USD.

The President's Office is pressing charges over issues related to money and quality of service. Zelensky’s advisor Mykhailo Podolyak, in a commentary to Ukrainska Pravda, said that law enforcement officers carried out the appropriate work, began to ask specific questions about money and the quality of service. “After another series of scandals, the prosecutor’s office systematically analyzed the situation and made the appropriate conclusions - quite transparent. Frauds worth tens of millions of hryvnias were revealed. This is not about politics, this is about the fact that a malicious shadow system has been built in Kyiv city structures,” he noted.

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Zelensky's close associate called Kyiv problematic: "Disgusting sidewalks and roads, lack of storm sewers even on recently renovated streets, lack of intelligible logistics for traffic management, enchantingly scandalous development, constant scandals around utilities."

What are the real goals of large-scale searches and pressure on Klitschko from Bankova, one can guess. But, obviously, the increase in the cost of travel against the background of the upcoming increase in payments for heat and hot water will not add points to the rating of Mayor Klitschko, who intends to compete with Zelensky in the next presidential elections.

At the same time, the city has a way to settle the problem with transport companies in Kyiv without raising tariffs. The appeals of the work collectives of Kyivpastrans and the Kyiv Metro contain a clear alternative - payment of compensation from the city budget. The metro will satisfy the amount of 54 million USD from the city budget, Kyivpastrans is asking for 90 million USD for support.

Transport expert Oleksandr Kava believes that the budget of Kyiv has enough funds to pay compensation in the amount requested by enterprises. "Municipal transportation is a planned unprofitable type of activity. In all European cities, they are compensated by budget funds. Unprofitable urban transport is normal for Europe. It is not considered a problem. In Europe, 80% of municipal carriers' budgets come from city budgets," said Kava.

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And it seems that this option will once again become an alternative to tariff increases. True, it looks like the city wants to do it with less gore. Yesterday, the Kyiv City Council sent an appeal to the Cabinet of Ministers and the Verkhovna Rada with a request to pay compensation from the state budget for reduced fares "in order to prevent an increase in tariffs in public transport." The document says that until 2016, the cost of transportation in public transport of beneficiaries was compensated to local budgets through subventions. "Due to the fact that the state refused to finance from the state budget the privileged travel guaranteed by the state for certain categories of citizens and shifted to local budgets the issue of financing compensation to enterprises that carry out transportation, territorial communities are forced to spend billions of hryvnias from local budgets to provide state-guaranteed benefits, often due to underfunding of other socially significant spheres, in particular health care, education, social protection of the population, housing and communal services," the document says.

The financial situation of the metro, like Kievpastrans, could improve if funds were paid in full from the budget to compensate for the travel of privileged categories, agrees Makogon. "Out of 31 preferential categories of people who are guaranteed free travel by the state, the city compensates only for travel of 11 categories. The remaining 20 are state preferential categories and the financial burden of carriers. Today, no one compensates for this," Natalya Makogon said.

In an appeal to the Cabinet of Ministers and the Verkhovna Rada signed by Klitschko, figures are given for the spending of the Kyiv city budget to compensate for preferential travel - 27 million USD in 2019, 18 million USD in 2020. For 2021, spending is planned in the amount of 29 million USD. The appeal stresses that if the issue of compensation from the central budget is not resolved, "local governments will have no choice but to take an unpopular and forced step - increasing the tariff for public transport."

Fares are growing

By blackmailing each other with the sensitive issue of tariff increases and fighting over who should pay the price for populist decisions, officials and politicians turn a blind eye to major problems that continue to grow exponentially. Kyiv's municipal transport is inconvenient for passengers, and such phenomena as overcrowded buses and trolleybuses at rush hours, long waiting times at public transport stops, do not disappear from the life of the Kyiv citizens. "Kyiv needs to increase the park of municipal transport, definitely. If we compare the number of transport on routes in Kyiv and Warsaw, cities that are comparable with each other, then in Warsaw there are almost 2.5 times more municipal transport units than in the Ukrainian capital," Kava told.

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According to him, residents of Kyiv spend more on public transport than residents of European cities - Warsaw, Prague, Budapest. "A resident of Warsaw, Prague and Budapest, for 25-27 USD, buys a monthly pass for all types of urban transport with an unlimited number of trips. The Kyivpastrans metro and surface public transport pass costs 50 USD per month," says Kava. At the same time, unlike Kyiv, in European cities, the pass is valid in all types of public transport, and in Kyiv, even if you buy a pass, you have to travel part of the way by minibuses, in which, of course, the pass does not work. You have to pay for travel in them separately.

"Private carriers in urban transport are a relic of the post-Soviet period. If we take the European model, there is no such transport plan. In European cities, it is either a municipal monopoly or a market dominated by a municipal company. In Berlin, it is 100% municipal transport, in Warsaw, 100% of trams are municipal transport. 80% of buses are municipal transport, 20% are two private companies. But they have a single payment system and there is no difference for passengers," Kava stressed.

The city authorities cannot fail to understand that an increase in the fare even by two hryvnias will open up the opportunity for minibuses to increase their fares. As Kyiv State Administration has repeatedly stressed, they cannot influence the size of tariffs set by private carriers. The only thing that is holding back private traders from such a step is the presence of competition from urban carriers. No matter how inconvenient the trolleybuses are, people will switch to them if the cost of travel in minibuses rises sharply. Statements about price increases in minibuses on behalf of the Association of Carriers of Kyiv and the Kyiv region are heard regularly. On April 3, the fare for 15 out of 150 routes increased from 0,29 to 0,36 USD.

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The bottom line is a sad prospect. Statements by officials and authorities eloquently indicate that as soon as funds are found in the budget, due to which it will be possible to maintain the status quo in tariffs, the problem will be temporarily exhausted, and the issue of urban transport will once again be thrown on the far shelf. Everything will go on as usual. So far, the people of Kyiv cannot count on improving the quality of transportation.

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