Business news from Ukraine


20 April , 2018  

Ukrainian railway car building enterprises received orders to produce over 1,000 cars in Q1 2018 from private companies operating on the cargo transportation market.
An Interfax-Ukraine correspondent has reported that acting Ukrzaliznytsia CEO Yevhen Kravtsov gave this information at the Ukrainian Infrastructure Forum in Kyiv on Thursday.
He linked this fact with the effect of deregulation of the railway car component of the tariff conducted early this year.
“We saw the reaction of the business to the market value of transportation in the cars of Ukrzaliznytsia. Loading of Ukrainian car building enterprises and increasing the private fleet of cars is an important fact. In the first quarter, Ukrainian car building enterprises received orders for more than 1,000 cars, and this is an important indicator,” Kravtsov said.
According to him, thanks to the deregulation of the car component at the beginning of this year, the cost of transportation by Ukrzaliznytsia wagons and by private wagons has become almost the same, which will attract private capital to the railway and stimulate the investment attractiveness of the railway car fleet.
“The imbalance in the freight transportation market regarding the cost of transportation by Ukrzaliznytsia wagons and private wagons was one of the main obstacles for private investment in the construction of wagons,” Kravtsov said.
The head of the company also said that conditions have now been created under which the introduction of a market price allows to receive back investments in a freight car during the period of its service life.
“Today, with the new prices for rolling stock, the payback of investments is 7-10 years and it is covered by the operating life of the car,” he said.
Kravtsov also said that today Ukrzaliznytsia, as one of the largest operators of the car fleet, is also interested in attracting investments in the car fleet, in particular, gondola cars and grain trucks, which are the most in demand today in the transportation market. It is for this purpose that at present Ukrzaliznytsia, together with the European Bank for Reconstruction and Development (EBRD), is implementing a project to increase the car fleet of the company by approximately 7,000 wagons.
“This project has direct economic effect and [efficient] payback,” Kravtsov said.