14:04 27.08.2020

New Ukrzaliznytsia head wants to divide Ukrzaliznytsia into four companies, change corporate structure

2 min read
New Ukrzaliznytsia head wants to divide Ukrzaliznytsia into four companies, change corporate structure

The new head of JSC Ukrzaliznytsia Volodymyr Zhmak wants to separate four vertically-integrated business units in Ukrzaliznytsia: freight, passenger, infrastructure and container transportation.

"I would like to single out four vertically integrated business units in Ukrzaliznytsia, with separate balance sheets that are able to calculate their income and losses: these are freight traffic, passenger traffic, infrastructure, and my innovation is to take container traffic separately. Container traffic is part of freight traffic now, but this is, in principle, a separate type of business," he said in an interview with Liga.Business.

After that, as Zhmak said, these business units should turn into separate companies within the Ukrzaliznytsia holding.

"For this, they must have everything to carry out their activities. The head of freight transportation must have both locomotives and wagons. And not like now: he goes right to take the locomotives and left to take the wagons," the new head of the company said.

Besides, Zhmak considers it necessary to change the corporate structure of the company.

"The system of forming the board in Ukrzaliznytsia is now quite complicated, the board is formed upon the submission of the supervisory board to the Cabinet of Ministers. And the government appoints board members. As far as I know, the decision of the board is formalized by two signatures: the chairman of the board and a member of the board responsible for the direction in which the decision is made. Members of the board are in direct contact with the supervisory board in the areas for which they are responsible... To implement the tasks that I set, I need a hierarchically well-structured system where I have the ability to make decisions and be responsible for the activities of the entire board, and not just those units that are under me," Zhmak said.

According to him, he will ask the supervisory board about this at the stage of signing the contract and vesting him with powers.

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