The decision by the Vice Prime Minister for the Reconstruction of Ukraine — Minister for Community and Territorial Development Oleksii Kuleba will determine whether the practice of ineffective functioning of "Ukrzaliznytsia" at the state level will continue solely through increased freight tariffs, notes the chairman of the Expert Analytical Council of the Ukrainian Analytical Center, Borys Kushniruk, reports Telegraf.
According to him, it is easier for the managers of "Ukrzaliznytsia" to raise freight tariffs than to tackle the "long-standing systemic issues" — excessive infrastructure, significant losses in passenger transportation, and a lack of expense optimization within the company itself.
"Mr. Kuleba's decision could define how his position and the ministry as a whole will be perceived in the future. Is Oleksii Kuleba ready to stop this endless draining of money from the Ukrainian economy through leaky state monopolies?" — the expert asks.
Kushniruk points out that the management of "Ukrzaliznytsia" intends to raise tariffs by 37%, which will lead to a decline in rail transport and an increase in losses. This is explained by the fact that industrial producers (agricultural products and metallurgy) will refrain from using UZ's services, as this will automatically raise their product costs and force them to abandon exports due to anticipated losses. Those with pending contracts will switch to road transport, which will damage the roads to the extent that "no 'Great Recovery' will help."