The Ministry of Infrastructure’s October 20 order on 15% indexation of railway freight tariffs in Ukraine entered into force on October 31, the Ukrainian Railways public joint stock company (Ukrzaliznytsia) announced.

According to the company, the indexation of tariffs by 15% is a compromise that was agreed during talks between the company and participants on the transport market. Ukrzaliznytsia will accumulate all the revenues from the indexation of tariffs in a separate investment account.

"We will spend the funds from the tariff indexation on modernization, construction, and purchase of rolling stock, as well as on infrastructure. The rolling stock renewal program provides for spending UAH 108 billion for this purpose until 2021. These are significant investments that have not been made in the industry for a long time and which will help stabilize its operation, increase transport volumes, and strengthen the Ukrainian economy," Ukrzaliznytsia’s acting board chairman Yevhen Kravtsov said.

Freight tariffs were last changed in April 2016. According to Ukrzaliznytsia, freight tariffs will increase by an average of only 2.5% in 2017.

The company’s development strategy until 2021 provides for indexation of tariffs in line with the rate of increase of the producer price index. Meanwhile, only 28% of Ukrzaliznytsia’s needs will be covered by the tariff change.