Losses in the railcar repair sector due to the situation on the rail transport market, in particular the surplus of railcars, may reach UAH 600 million in 2025, and more business involvement is needed to find alternatives, said Yevhen Shramko, head of the Repair and Production Division at Ukrzaliznytsia (UZ).
“At a meeting (with businesses and investors in August, initiated by UZ – IF-U), we discussed the forecast for the car fleet, which, unfortunately, is disappointing. New railcars are hardly being built due to the surplus. All this leads to the fact that, according to our forecasts, the losses of the railcar repair division will reach UAH 600 million by the end of 2025,” he said in an interview with Interfax-Ukraine.
The UZ representative recalled that transport volumes had decreased by 40%, and transport by the state-owned company’s railcars had decreased even more, by 58%. As a result, the volume of repairs, almost 70% of the cost of which is personnel expenses, also decreased by 55%.
Shramko noted that given this situation and the worsening forecast for the coming year, the company decided to go public and attract international partners, consultants who can help obtain grants or other funding to transform car repair enterprises without losing personnel and potential, as well as to attract as much business as possible for more efficient use of production capacities, which are currently redundant.
Shramko clarified that after the meeting, all participants were sent a questionnaire to obtain information about the real needs of the market, in particular, what facilities are needed, taking into account their location and infrastructure (electricity, gas, water supply).
“We only received 13 responses. To be honest, this is not enough. So we will continue to work with businesses, associations, and investors,” said the head of the department.
According to him, this is the first step towards transparent optimization and reorganization of excess production capacities that generate losses for Ukrzaliznytsia. Next, a list of facilities and proposals for international and local investors will be prepared.
“We are considering various options: leasing, public-private partnerships, and repurposing, and we want all of them to be implemented on a competitive basis,” Shramko emphasized.
He added that next year, during the proper gradual reorganization, it is planned to tackle the locomotive repair sector, where the company also has significant capacity.
“Given the current situation in the industry and the dynamics of transportation, a return to last year’s volumes seems unlikely at this point, according to our forecasts,” the director of the division emphasized.
Ukrzaliznytsia’s Repair and Production Division is responsible for the repair, maintenance, modernization, and manufacture of railcars, locomotives, and electric trains. It produces critical spare parts, reinforced concrete sleepers, technical equipment, etc. It has 11 enterprises, some of which are branches, and some are private joint-stock companies.
As reported, the volume of freight transportation by rail in Ukraine decreased from 180 billion t*km in 2021 to 113 billion t*km in 2024, and transportation by the company’s railcars decreased from 1,206,000 to 727,000. This year, these figures are expected to decrease to 106 billion t*km and 481 thousand, respectively.
These conditions led to a decrease in the volume of car repairs from 31,750 in 2021 (of which 20,150 were Ukrzaliznytsia cars) to 24,230 in 2024 (12,480), and this year a further reduction to 14,040 (3,960) is expected.
