Ukrzaliznytsia expects that in 2026 its losses will exceed 28 billion UAH, with the majority of the losses related to passenger transportation. Part of this deficit is planned to be covered by one-time subsidies from the reserve fund; however, the basic scenario for the next year remains budgetary support for unprofitable passenger transport.
This is reported by Finway
Freight Tariffs and Economic Impact
An increase in freight transportation tariffs by 37% could negatively impact the country’s economy. Experts warn that such a decision will lead to an even greater deficit of passenger tickets. According to Ruslan Illichov, the General Director of the Employers’ Federation, the current funding model, where all revenues from freight transportation are directed to cover passenger transport losses, is a vicious cycle with no way out.
“If we maintain the current model, where Ukrzaliznytsia earns from freight transportation and directs all funds to finance unprofitable passenger services, the company will find itself in a closed loop with no way out. Without the ability to invest, Ukrzaliznytsia will underfund capital investments, and efficiency will decline”
Need for a Change in Tariff Policy
Oleg Nivievskyi, an associate professor at the Kyiv School of Economics, emphasizes that transportation tariffs should not be tied to macroeconomic indicators. He believes that the monopoly should transparently disclose its cost structure and form tariffs based on that. Low passenger ticket prices create a deficit, leading to revenue loss. This problem can be solved by dynamic pricing, which will reduce cross-subsidization of passenger transport at the expense of freight.
Deputy Minister of Economy Andriy Teliupa emphasized that a 37% increase in tariffs for freight transportation is an unrealistic step. He noted that globally, compensating costs for passenger transportation by the state is a common practice.
Member of Parliament Musa Magomedov also pointed out that Ukrzaliznytsia performs strategic and social functions during the war, and without state support, it may come to a halt. The MP stressed the need for funding the company from the state budget for at least the next few years, as the unprofitability of passenger transportation was observed even before the war, and since its onset, the burden on the railway has only increased due to the transfer of air transportation to it. Planning for budgetary support is necessary for an extended period, as compensating losses solely through freight transportation is impossible.