The indexation of the tariffs for freight transportation by rail in 2017 would allow public joint-stock company Ukrzaliznytsia to cover at least one third of the needs in investment for upgrade of rolling stock, the press service of Ukrzaliznytsia has reported, referring to Director for Economy and Finances Andriy Riazantsev.
At a meeting with transport market participants in the Federation of Employers of Ukraine devoted to the indexation of the tariffs for freight transportation by rail the market players discussed the possibility of indexing the tariffs in 2017 by 15%, while earlier the option of increasing them by 22.5% was discussed, but it was not approved.
Riazantsev said that today Ukrzaliznytsia's rolling stock is deteriorated by over 90%, and in several years the operating life of the major part of the company's wagons and locomotives would expire. Ukrzaliznytsia has drawn up a program to upgrade the rolling stock until 2021 and send UAH 108 billion to modernization of the rolling stock.
Thanks to this investment and investment in infrastructure Ukrzaliznytsia will be able to transport freights and passengers and improve its operation indicators influencing on the quality of transportation, including the turnover of wagons.
"We laid the indexation of the tariffs at the level of growth of industrial producers prices into the strategy, and only 28% of the Ukrzaliznytsia's needs will be covered thanks to the change of the tariff. We do not have a chance to repair and upgrade the rolling stock only thanks to the indexation," he said.
At the meeting representatives of Ukrzaliznytsia recalled that the tariffs were revised in April 2016, and the prices of products consuming by the sector have significantly grown since then.
"In January-August 2017 year-over-year growth of the cost of railway transportation is 107%, and industrial prices grew by 130.8%. We have the difference of 23.8 percentage points, and the gap should be at least reduced, in particular via the change of the tariffs. Why do we buy metal at the price that is 25-30% higher than a year ago, and we cannot index our services even by 15%," Riazantsev said.
As reported, on September 13, 2017, the Cabinet of Ministers of Ukraine approved a consolidated financial plan of Ukrzaliznytsia for 2017, taking into account the increase in the tariff by 22.5% from October 1, 2017.
However, the State Regulatory Service of Ukraine proposed to revise the increase of the tariffs and the document on the 22.5% increase in the tariffs remained unapproved.
