KYIV. April 8 (Interfax-Ukraine) – The Metallurgprom Association (Dnipropetrovsk) and the Federation of Metal Companies of Ukraine have sent a list of top-priority anti-crisis measures to resolve problems of Ukrainian exporters of the metal and mining sector jeopardizing Ukraine’s economic and industrial growth potential. The problems require urgent attention by the relevant national Ukrainian authorities.
The letter, a copy of which has been forwarded to Interfax-Ukraine, was sent by Head of Metallurgprom Oleksandr Kalenkov and Head of the Federation of Metal Companies Serhiy Bilenky to the president, prime minister, parliamentary speaker and head of the National Security and Defense Council (NSDC).
Exports problems should be resolved to stabilize the critical situation in the economy, especially in the metal and mining sector.
The associations’ heads believe that the exports duty on scrap metal is to be increased from EUR 10 to EUR 35 per tonne and a zero rate for imports of scrap metal is to be introduced. This would help increasing payments to the budget from the exports duty, improve the situation with scrap metal supply to metal companies and boost production of goods with high added value, increase exports and exports income by $150 million a year.
The associations propose that an investment project of Ukrzaliznytsia to improve the through-put capacity of railways towards Mariupol on the Kamysh-Zoria-Volnovakha section to 22 freight trains a day is implemented in 2016. This will help to load metal companies in the region and add around $1 billion of currency income every year.
Metal companies said that the issues of legal and economic functioning of Ukrzaliznytsia on the territory that is not under control of the Ukrainian government should be settled. This would stabilize raw materials and product shipments, including coal and limestone.
The tariff for gas transportation by trunk and distribution pipelines for industrial consumers should be cut to the average European level ($10-12 per cubic meter). This would support competitiveness of Ukrainian exporters on the European market compared to European producers.
The associations back the bringing of port fees in Ukraine (today $2-3.5 per tonne) to the justifiable level comparable to the fees at rival ports – China, Turkey, Russia, Australia and Brazil ($0.8 per tonne). A moratorium on indexation of tariffs for shipment by rail should be introduced at least in 2016 and return the amendments to the railways tariff collection proposed by the Infrastructure Ministry for revision, as they would significantly worsen the situation with freight owners.
Metal companies also proposed to resume VAT refunding to companies that are re-register from the territory that is not under control of the Ukrainian government and pay taxes to the Ukrainian budget, to refund all VAT debt in April-May 2016 and extend land utilization benefits for mining companies.
