You're reading: State Railways: state should define its role on rail transportation market

State Railways Administration Ukrzaliznytsia has warned of the threat of a gradual loss of cargo transportation by state wagon companies with corresponding losses in the national budget and a failure to provide the required volume of cargo transportation by the railways of Ukraine.

According to the press service of Ukrzaliznytsia, this is due to a
lack of government support aimed at creating conditions to upgrade
freight rolling stock, its catastrophic depreciation and a temporary
mismatch in the purchase and writing-off of freight cars.

According to the Ukrzaliznytsia experts, the functioning of the rail
freight market under a tight control over tariffs and a non–availability
of tariff indexation is in extremely adverse conditions.

“It is impossible to require development and renewal and at the same
time not to give financial instruments for its implementation,” the
administration said.

Thus, in 2012 Ukrzaliznytsia saw a shortage of Hr 2 billion due to the non–availability of tariff indexation.

“This is money to be used for maintaining the normal state of
infrastructure. This index did not contain an investment component,”
said Ukrzaliznytsia.

Ukrzaliznytsia said that if a similar situation continues to develop,
Ukrzaliznytsia would have problems with the investment component of the
tariff necessary for development and in 2013-2017 its state-owned
enterprises would not be able to carry all the necessary range of goods.