Freight transportation tariffs in Ukraine will be increased by fifteen per cent per the 1st of November, according to several media outlets. The earlier proposal to increase the rates by 22.5 per cent as of October were blocked by the State Regulatory Service. The authority has approved the current proposal.

Although the decision has not been announced officially, the national railway company Ukrzaliznytsia is said to have declared on a social media account that “the approval was the result of a compromise reached in an open dialogue with business”. Indeed, a meeting with transport market participants in the Federation of Employers of Ukraine devoted to the indexation of the tariffs for freight transportation by rail took place earlier this month, with the objective to discuss the possibility of indexing the tariffs by fifteen per cent.

Investment

Ukrzaliznytsia explained earlier that the fifteen per cent increase would allow the company to cover at least one third of the needs in investment for upgrade of rolling stock. This rolling stock is deteriorated by over ninety per cent and in several years the operating life of the major part of the company’s wagons and locomotives would expire, director for economy and finances Andriy Riazantsev explained.

Ukrzaliznytsia has drawn up a program to upgrade the rolling stock until 2021 and allocated 3.4 billion Euros for the modernisation project. With the tariff increase, Ukrzaliznytsia is believed to generate 40 million Euros in additional revenue/income from the rate hike this year. This is sixty per cent less than it had planned to generate with the fee hike. Ukrzaliznytsia revealed on Tuesday that it plans to build 4,000 gondola cars and around 200 fitting platforms at own production facilities next year. In addition, it plans to buy 700 grain carriers next year.