According to estimates by CFTS Consulting, initial restoration of the destroyed railway infrastructure in the Donbass industrial region will require about UAH 10 million and its full restoration will require more than UAH 300 million.
Restoration work worth UAH 6 million had been performed on the Donetsk Railway as of 10 October.
"The destruction of infrastructure has blocked the region’s logistics: most enterprises are idle, repair crews have limited access, there is traffic on the restored segments only if there is no fighting, and it is slow. However, restoration of infrastructure is performed quickly enough in the segments where there is no fighting," said Dmytro Yahello, an analyst with CFTS Consulting.
The only railway segment through which it is possible to deliver cargo to Donetsk is the Kamysh-Zarya-Donetsk segment. At present, this segment is operating at full capacity. The capacity of the segment accounts for 30 percent of the needs of the region.
Meanwhile, according to CFTS Consulting, the average daily cargo loading volume in the Donetsk region was 220,000 tons in September 2014, which is 26 percent less than the volume in in September last year. At that time, the average daily loading in the region was 300,000 tons.
In the Lugansk region, the margin of reduction is higher at 48 percent: the average daily loading volume reduced from 232,000 tons to 121,000 tons.
In the first nine months of this year, the average daily loading volume reduced by 16 percent in the Donetsk region and 29 percent in the Luhansk region.
As a result, the total average daily loading volume in Ukraine reduced by 9 percent to 975,000 tons.
According to forecasts by CFTS Consulting, the Donetsk Railway will lose UAH 1-1.5 billion in revenues in the first three quarters of 2014 as a result of the reduction in loading.
CFTS Consulting emphasized the importance of the region to Ukraine’s cargo base: the Donetsk region accounts for 23 percent of the total volume of freight transported by rail in Ukraine while the Lugansk region accounts for 10 percent. The Donetsk region accounts for 17% of the country’s total exports by rail and 41% of the total volume of coal transported by rail.