JSC “Ukrzaliznytsia” (“UZ”) and Spain’s national railway operator Renfe have agreed on a strategic partnership aimed at developing freight and passenger transportation, according to a company statement released on Friday.
“Ukrzaliznytsia and Renfe—Spain’s national railway operator, with over 80 years of experience in passenger transport and more than 30 years of operating high-speed trains—have agreed on a strategic partnership,” UZ wrote on its Telegram channel.
The agreement is expected to cover the implementation of technologies for automatic gauge change, the establishment of interconnection points between different systems, and the planning of the development of the European gauge.
Among other things, the companies will explore opportunities to develop and organize passenger routes on the 1,435 mm gauge in Ukraine, both on existing lines and on sections that are under construction or planned for construction.
Furthermore, the memorandum provides for cooperation in the field of freight transport and intermodal logistics between Ukraine and the countries of the European Union.
“Ukrzaliznytsia, for its part, will share its unique experience in ensuring the continuity of transportation, the rapid restoration of infrastructure, and the resilience of the railway system amid a full-scale war,” the statement reads.
As part of this collaboration, technical teams will exchange expertise in modern traffic control and safety systems, as well as in increasing capacity and improving service quality for passengers and shippers.
The parties will also work on further developing barrier-free infrastructure and rolling stock for people with disabilities and other mobility-impaired groups.
Ukrzaliznytsia clarified that the cooperation is formalized by a memorandum with Renfe’s subsidiary, Renfe Proyectos Internacionales Sociedad Mercantil Estatal (RPI).
Ukrzaliznytsia’s international passenger traffic has increased 50–60-fold since the start of Russian aggression and the closure of Ukrainian airspace, and is generating significant profits, according to Ukrzaliznytsia CEO Oleksandr Pertsovskyi.
“This is a profitable segment; pricing is fairly flexible there and is determined by bilateral agreements. We expect to generate up to 5 billion hryvnias in revenue and somewhere around 2 billion hryvnias in profit in this segment,” he said on the “What’s Up with the Economy” podcast produced by the Center for Economic Strategy (CES).
At the same time, Pertsovskyi noted that this result was achieved by repairing a “huge number” of RIC railcars and reaching agreements with all the railways of neighboring countries.
“From an economic standpoint, everything is fine here; the key task is to scale up these operations. We really wanted to launch a train to Bulgaria—another popular route—but politics got in the way because governments changed in Romania and in Bulgaria itself, so there are some complications,” added the chairman of the board of Ukrzaliznytsia.
According to him, they have not yet managed to convince Poland to allow wider Ukrainian railcars to run on European-gauge tracks, even though a pilot run demonstrated that this is possible and such railcars regularly run on European-gauge tracks toward Budapest.
Among the latest successful projects, he cited the transition of the train to Chisinau to a daily schedule instead of every other day, as well as the synchronization of service with Germany.
Regarding domestic long-distance trains, Pertsovskyi emphasized that the government’s introduction this year of an experimental Public Service Obligation (PSO) compensation model—which covers part of the company’s costs for such services—allowed this segment to break even for the first time.
However, the head of Ukrzaliznytsia clarified that there is still a need for capital expenditures to purchase new passenger cars, since renewing the fleet of 1,600 cars with an average cost of $1.5 million would require over $2 billion; therefore, it is positive that the state budget has allocated funds for the purchase of such cars starting in 2021.
As for the “Intercity” trains, according to Pertsovskyi, one was lost due to an enemy attack, and another due to a traffic accident.
“We are currently working on a more systematic, long-term solution for their repair. It’s not cheap, and since the trains aren’t new, manufacturers aren’t really prepared for this, but at the same time, we’re turning them into ‘transformers’: using fewer cars but getting them back into service,” said the chairman of the board.
Finally, he emphasized, the most unprofitable and problematic segment of passenger transportation remains—commuter rail.
“There is no solution here yet, because it’s stuck between the state budget and local budgets, but there is a willingness and unity within the government—and on our part—to pass a law this year on state procurement, the so-called public PSO, including for commuter (transportation). We would greatly appreciate your support and advocacy; this will make it possible to balance this segment as well, and then we will be in a stable economic situation,” Pertsovskyi concluded.
In 2025, Ukrzaliznytsia reduced its revenue from sales to external customers by 12.4% compared to 2024—to 91.24 billion—and increased its operating loss by 5.5 times—to 17.03 billion hryvnias.
Revenue from intercity passenger transportation on domestic and international routes increased by 11.8%—to 11.94 billion hryvnias—while the loss from these services rose by 9.1%, to 9.62 billion hryvnias.
Suburban transportation generated only 0.51 billion UAH in revenue and 9.996 billion UAH in losses for the company, which is 2.8% less and 7% more, respectively, than in 2024.
Finally, freight transportation declined by 17.1% to 67.87 billion UAH, while profit from this segment fell 3.5-fold to 5.82 billion UAH.
“Ukrzaliznytsia” continues to modernize its rolling stock; new passenger cars manufactured in Ukraine have already been added to the train set for Train No. 29/30 Kyiv–Uzhhorod, Ukrzaliznytsia announced on Saturday.
These cars will immediately begin service today on Train No. 4/3 from Uzhhorod to Dnipro, and taking into account the cars received a month earlier, there are now six new cars operating on the Kyiv–Uzhhorod–Dnipro route, according to a Telegram post.
The cars are equipped with high-capacity rechargeable batteries, which allow the air conditioners to operate even during prolonged stops in hot weather. The compartments also feature power outlets, tables for passengers in the upper berths, buttons to call the conductor, and modern lighting. The restrooms are equipped with changing tables and child seats.
As noted, Ukrzaliznytsia has received a total of 18 new passenger cars since the beginning of the year.
JSC “Ukrzaliznytsia” expects to post a net loss of 21.9 billion hryvnia and a liquidity shortfall of 26.3 billion hryvnia for 2026, assuming no fare indexation, said the company’s CEO, Oleksandr Pertsovskyi, during a press conference on Tuesday, according to a correspondent for the “Interfax-Ukraine” news agency.
According to him, among the main reasons for the deterioration in financial performance are a 2.4-fold increase in the cost of electricity, which led to additional expenses of 15.4 billion hryvnia; the need to index wages—13.4 billion hryvnia; a decline in revenue from freight transportation—7 billion hryvnia—due to hostilities and the occupation of parts of the territory; an increase in exchange rate losses from the revaluation of liabilities amounting to 3.8 billion hryvnia; and a 28% rise in diesel fuel prices, which cost the company an additional 2.1 billion hryvnia.
According to the company’s estimates, due to the suspension of fare indexation, the shortfall in cash receipts for the period from 2023 through the first three months of 2026 amounts to 99.5 billion UAH.
To cover this financial shortfall, Ukrzaliznytsia is implementing additional optimization measures for 2026, which will allow it to raise 1 billion UAH from the sale of non-core and surplus assets and 2.3 billion UAH in loans from international financial institutions, provided that fare indexation takes place.
Other measures include optimizing CAPEX, through which the company plans to accumulate 6.9 billion UAH by addressing the underfunding of critical capital investment needs. At the same time, internal funds for financing CAPEX in 2026 will amount to approximately 16.1 billion UAH.
A government decision is also required to resume, effective July 1, 2026, the sale of electricity to Ukrzaliznytsia through specialized auctions, with the introduction of a corresponding discount from the weighted average market price of electricity.
Other factors include a plan to increase suburban rail fares by 100%, though this requires approval from regional military administrations.
Among the proposed measures to stabilize Ukrzaliznytsia’s financial situation, the company also proposes raising freight rates by 30% effective August 1, 2026. The first phase involves an immediate rate increase and the standardization of rates for empty railcars.
Pertsovskyi emphasized that June is a critical period for making a decision on revising tariffs, as the regulatory procedure takes about two months.
“This is the last chance to make a decision before August, and by August we’ll simply be heading straight into the red at this pace. We still have a guaranteed debt payment due in August,” added the chairman of the board.
According to Pertsovskyi, a second phase could involve a further tariff adjustment of up to 15% starting in January 2027, though no such decision has been made yet.
As noted in the draft order, the need to adjust tariffs stems from the deteriorating financial condition of JSC “Ukrzaliznytsia,” whose revenues are insufficient to cover current expenses. The ministry noted that the last tariff adjustment took place nearly four years ago, while between July 2022 and April 2026, the industrial producer price index rose by 252.1%.
According to the Ministry of Development, in 2025, freight volumes decreased by 12.5% compared to the previous year, and Ukrzaliznytsia’s net loss amounted to 7.6 billion UAH. In the first four months of 2026, the loss reached 9.3 billion UAH.
At that time, the ministry noted that without tariff indexation, the company’s projected net loss for 2026 would exceed 13 billion hryvnia, and the funding shortfall would reach over 26 billion hryvnia.
Among other things, in January of this year, Ukrzaliznytsia refused to make $45 million in coupon payments on its 2026 Eurobonds with an 8.25% coupon rate totaling $703.2 million and on its 2028 Eurobonds with a 7.875% coupon rate totaling $351.9 million, and announced its intention to begin a comprehensive restructuring of its bond obligations with the assistance of financial and legal advisors.
The company cited the ongoing decline in revenue from freight transportation amid a decrease in freight volumes, as well as an increase in attacks on the railway—the total number of which in 2025 (1,195) exceeded the combined total for 2023–2024—as the main reasons for suspending debt service on the Eurobonds.
FARE, FREIGHT TRANSPORTATION, liquidity, LOSS, UKRZALIZNYTSIA
JSC “Ukrzaliznytsia” (UZ) transported over 1 million passengers between June 8 and 21, with the Kyiv-Lviv route (in both directions) proving to be the most popular among Ukrainians, where demand for tickets was three times higher than supply.
“To give more people the opportunity to travel, we scheduled additional trains,” UZ reported on Telegram on Wednesday.
According to the company’s statistics, the shortage on the Kyiv–Odesa route is 4.5 times the supply. Meanwhile, on the Kyiv–Kharkiv, Kyiv–Dnipro, and Kyiv–Vinnytsia routes, demand is twice the supply.
It is noted that the most popular train that departed last week was No. 705/706 Kyiv–Przemyśl, which carried 26,800 passengers.
In addition, from June 8 to 21, the average number of passengers per car was 692.
The number of passengers in children’s groups totaled 43,500, while 7,700 military personnel traveled via the special reserve.
“We understand the scale of the seat shortage, so we are trying to add trains to popular weekend getaway destinations whenever possible,” Ukrzaliznytsia emphasized.
As previously reported, Ukrzaliznytsia transported 472,900 passengers during the first week of June (June 1–7). At that time, it was noted that Ukrzaliznytsia plans to transport a total of 7 million passengers over the three summer months.
In early June, Ukrzaliznytsia told the Interfax-Ukraine news agency that this year’s summer passenger travel season would be more challenging than last year’s due to rising demand and a reduction in the number of railcars.
More than EUR20 million is expected to be raised for JSC “Ukrzaliznytsia” during the Ukraine Recovery Conference (URC 2026) as part of the business component, which will involve the signing of certain documents, Deputy Prime Minister for Recovery and Minister of Community and Territorial Development Oleksiy Kuleba said in an interview with the “Interfax-Ukraine” news agency.
According to him, the ministry, as part of its resilience efforts, will present situation centers that have been deployed throughout the country. These are centers where dispatchers coordinate air raid alerts or any other threats online 24/7, making decisions regarding the suspension of trains, the evacuation of people, or changes to freight routes.
“This is very serious work that helps us minimize damage and save the lives of passengers and employees, despite constant attacks,” Kuleba emphasized.
The Deputy Prime Minister for Recovery also noted that Ukrzaliznytsia and the port sector are bearing the brunt of the impact amid constant enemy shelling.
“The Russians are doing this entirely deliberately, knowing that in this way they can destroy our export potential so that we cannot ship out what we produce,” Kuleba stressed.
Earlier reports indicated that since the beginning of this year alone, the enemy has launched more than 1,500 attack drones at Ukrainian ports.
In addition, since the start of the full-scale invasion, 966 port infrastructure facilities and more than 200 civilian vessels have been damaged or destroyed.
Furthermore, 257 civilians have been injured or killed as a result of attacks on Ukrainian ports.
“Ukrzaliznytsia,” for its part, noted that during the first quarter of 2026, the enemy carried out 541 strikes on railway infrastructure and rolling stock.
The Ukraine Recovery Conference (URC 2026) will take place on June 25–26 in Gdańsk, Poland. The Ukrainian delegation will be led by Ukrainian Prime Minister Yulia Svyrydenko.
