The Ukrainian Cabinet of Ministers has decided to launch a pilot program under which the state will procure domestic long-distance passenger transportation services. The Ministry of Development of Communities and Territories developed the project in cooperation with the Ministry of Finance.
The Ministry of Development of Communities and Territories announced this, as reported by the CFTS portal.
This initiative involves a gradual transition to the European PSO (Public Service Obligation) model, under which the state systematically compensates a carrier for the difference between the actual cost of providing transportation services and the socially affordable tariffs currently in effect.
"We have developed a mechanism that brings the Ukrainian system closer to the European model for procuring socially important transport services," said Deputy Prime Minister for Reconstruction of Ukraine and Minister of Development of Communities and Territories Oleksii Kuleba.
The state order for passenger transportation is set at UAH 16 billion for 2026. These funds will cover the main long-distance routes to ensure that the country remains connected. The state will not only place orders for services but also monitor their fulfillment.
The State Audit Service of Ukraine (SASU) will be involved in verifying the accuracy of expenditures from the very beginning to ensure that every hryvnia from the state budget is spent efficiently. Funds will be disbursed quarterly as advance payments. Transportation services provided in January–February 2026 will also be financed.
The new model introduces predictable rules for financing passenger rail transport services, reduces the financial burden on the Ukrainian Railways joint-stock company (Ukrzaliznytsia), and will gradually enable the elimination of cross-subsidization between different types of rail transport operations.
"The pilot mechanism is a step towards fully integrating the Ukrainian passenger transportation financing system into the European PSO model, which is widely used in EU countries," said the ministry.
