Ukrainian Railways Should Be Opened To Foreign Operators – Omelian

10 July 2017 17:46

Minister of Infrastructure Volodymyr Omelian is in favor of allowing foreign railway operators to operator in Ukraine. Omelian announced this at the Grain Ukraine conference in Odesa.

"My vision for development of the railways is simple: the railways should be responsible for the infrastructure and the state for the roadbed. Everything else – railcars and rolling stock – can be private. I am in favor of opening the railway to private operators, including foreign operators, which will offer competition, the best quality, and equal conditions for all. The relevant bill is in the parliament, and I will insist on its consideration despite all the resistance. However, you can already think about this today: how you will transport goods by railroad in three to five years. Possibly, they will be your locomotives and railcars," the minister of infrastructure said.

As reported, the reforms that are intended to separate the economic and regulatory functions in the industry were essentially expected to begin with the draft law on rail transport. However, the draft law had not yet been adopted by the time the Ukrainian Railways public joint-stock company (Ukrzaliznytsia) began operation (instead of the state railway administration) in early 2016. Voting on it has been postponed several times.

Ukrzaliznytsia and businesses have already begun reaching mutual understanding on the issue of traction despite the fact that there are currently no private locomotive operators in the country. For example, PJSC Ivano-Frankivsk Cement uses a General Electric locomotive on its main route, thanks to Ukrzaliznytsia’s decision to change its tariffs to accommodate "private locomotives with their own locomotive teams."

However, a law is needed before businesses can start using their own locomotives on Ukrzaliznytsia’s networks on a large scale. Ukrzaliznytsia’s own fleet of locomotives is considerably outdated and insufficient to meet the needs of all customers

The head of Ukrzaliznytsia’s supervisory board, Yevhen Kravtsov, said in April 2017 that it would take five to six years for private operators to be allowed to operate locomotives on Ukrzaliznytsia’s network. "We cannot liberalize traction right now – before creation of competitiveness and stabilization of the situation in Ukrzaliznytsia – because this will undoubtedly lead to collapse of the railway. We estimate this period at five to six years," he said.