The rise in railway tariffs for freight transportation may increase the load on road transport and road infrastructure, as well as increase prices for final products in the energy and construction sectors.
This opinion was expressed by representatives of core business segments at a press conference at Interfax-Ukraine.
“Ukrzaliznytsia, as a monopoly carrier, is once again simply raising tariffs. What will this mean for the cement industry: firstly, the prices for the transportation of coal will rise, and secondly, the prices for the transportation of raw materials and additives to cement will rise. Thirdly, prices will rise directly for the final product for the consumer,” Executive Director of the Association of Cement Producers of Ukraine (Ukrcement) Liudmyla Kripka said.
According to preliminary estimates of the association, such an increase in tariffs will affect both the cost of cement and the final product for the consumer by about 5-8%, which, in turn, will increase the cost of construction projects.
At the same time, Kripka said that Ukrzaliznytsia may not receive the expected income from the increase in tariffs due to the transfer of enterprise logistics to the segment of road transportation.
“As a result, Ukrzaliznytsia will not receive income, but the load on road transport will increase,” she said.
Director General of the Federation of Transport Employers of Ukraine Volodymyr Husak agreed with this forecast. According to him, Ukrzaliznytsia will not be able to implement the plan to receive about UAH 2 billion by the end of this year from the increase in freight rates.
“This money will not be available, as we will see an accelerated withdrawal of Ukrzaliznytsia’s clients primarily to highways. This trend has been observed for several years… Due to the reorientation of goods to highways, there will be an additional load. Roads will collapse faster. There will be no effect from the implementation of the Big Construction program of the President of Ukraine,” he said.
In addition, Husak said that due to the rise in the cost of transportation of building materials – crushed stone, cement – the volume of the Big Construction program will also decrease.
At the same time, maintaining low prices in the passenger segment and an increase in the cost of cargo transportation will ultimately lead to an increase in tariffs in the energy sector, Deputy Chairman of the Federation of Employers of the Fuel and Energy Complex of Ukraine Serhiy Chekh said.
“What will the implementation of this order [of the Ministry of Infrastructure] mean for us, power engineers? This is extra UAH 40-50 per tonne of transported coal and about 3% growth in the cost of electricity at the exit from the thermal power station,” he said.
Experts emphasize that for the effective development of the rail transport market, it is necessary to ensure equal competitive conditions, introduce projects for the use of private locomotives, and update legislation in this area. In addition, it is necessary to update the management and supervisory board of Ukrzaliznytsia for effective governance, to carry out its reform in accordance with the government’s plans.
As reported, earlier in July, the Ministry of Infrastructure of Ukraine published a draft order on a two-stage increase in tariffs for cargo transportation of a group of goods of 1 and 2 tariff classes from September 2021 by 8%, and from January 2022 – by 20.4% and 6.5%.
Astarta, the largest sugar producer in Ukraine, over January-June and April-June 2021 reduced sugar sales compared to the same periods in 2020 by 25%, to 55,460 tonnes and 113,600 tonnes, respectively, while over the first half and the second quarter, the products sold by it went up by 66%, to UAH 17,280 per tonne and UAH 16,690 per tonne, respectively.
According to the company’s report on the Warsaw Stock Exchange on Friday evening, sales of corn by the agricultural holding in the second quarter of 2021 fell by 21% compared to the second quarter of 2020, to 78,650 tonnes, while the price increased by 9%, to UAH 4,950 per tonne. In the first half of this year, its sales decreased by 55%, to 151,290 tonnes with a rise in price of corn by 17%, UAH 5,270 per tonne.
In addition, in the second quarter of 2021, Astarta sold 34% less soybean meal than in the second quarter of 2020 – some 23,750 tonnes (with a rise in price of 45%, to UAH 14,570 per tonne); 49% less soybean oil – 4,210 tonnes (its price has doubled to UAH 37,840 per tonne); 5% more milk – 23,650 tonnes (it has risen in price by 20%, to UAH 11,600 per tonne); and also twice as much wheat – 2,240 tonnes (it has risen in price by a quarter, to UAH 6,550 per tonne). During the specified period, the company has increased sales of sunflower seeds 4-fold, to 135 tonnes, with their rise in price 2.7 times, to UAH 19,180 per tonne.
According to the results of the first half of 2021, Astarta sold 23% less soybean meal than in the first half of 2020 – some 63,520 tonnes (with a rise in price of 59% to UAH 14,960 per tonne); 13% less soybean oil – 16,840 tonnes (with a rise in price by 76%, to UAH 31,580 per tonne); 4% more milk – 47,850 tonnes (it has risen in price by 17%, to UAH 11,680 per tonne); and also 37% more wheat – 6,070 tonnes (it has risen in price by 56%, to UAH 7,410 per tonne). During this period, the company increased sales of sunflower seeds 37 times, to 3,720 tonnes, with their price doubling to UAH 11,590 per tonne.
Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It includes eight sugar factories, agricultural enterprises with a land bank of 243,000 hectares and dairy farms with 25,000 animals, seven elevators, a biogas complex and a soybean processing plant in Poltava region (Globino Processing Plant LLC).
The State Property Fund (SPF) has issued an order on the privatization of the power generating company PJSC Centrenergo.
“By order of the State Property Fund No. 1275 dated July 23, 2021, the decision was made on the privatization of a state-owned enterprise – a state-owned stake of shares in the amount of 78.289% of the charter capital of the public joint-stock company Centrenergo. These are 289,205,117 shares,” the SPF said in a statement on its website on Monday.
According to the order that approved the plan for the placement of shares, the stake of the power generating company is planned to be placed at an auction with conditions from August 2 to December 31, 2021.
The SPF’s large privatization department shall ensure the creation of an auction commission and a competitive selection of an advisor to prepare for privatization and the sale of the stake.
Metinvest Mining and Metallurgical Group through PrJSC Dniprovsky Coke and Chemical Plant (DKHZ, Kamianske, Dnipropetrovsk region), part of the group, will acquire an integral property complex of Dniprovsky Integrated Iron & Steel Works (DMK, Kamianske, Dnipropetrovsk region) for UAH 9.17 billion with a starting price of UAH 8.395 billion.
According to the information on the ProZorro.Sales platform, bids were accepted until July 25 inclusive, the auction was scheduled for July 26, but since one bid was submitted for the competition, the winner was determined without bidding.
Earlier, Interfax-Ukraine was informed that Metinvest would acquire DMK through its company, DKHZ.
DMK was undergoing reorganization as part of the bankruptcy proceedings of the enterprise.
In Ukraine, they want to officially allow mixing different types of vaccines, chief sanitary doctor Ihor Kuzin said.
“The National Technical Group of Experts on Immunization, as the main advisory agency of the Health Ministry, recommended to allow the so-called mixing of the vaccine, but under strict observance of certain conditions. We are talking about the possibility of administering a second dose of Comirnaty/Pfizer-BioNTech after the first dose of Moderna’s mRNA vaccine, if it is not possible to complete the vaccination with the same medicine. Also, if a person has a severe allergic reaction to the first dose of the vector vaccine from AstraZeneca, it is allowed to administer a second dose of Comirnaty at the doctor’s discretion,” Kuzin said.
According to him, the relevant decision of the expert group has already been made. Now the issue of issuing the relevant decision and the development of detailed step-by-step instructions are being considered.
National bank of Ukraine’s official rates as of 26/07/21
Source: National Bank of Ukraine
