Railway in need of investment: Ukrzaliznytsia railway company on the brink of cargo transportation collapse
Business18:18 Nov. 17, 2016

Ukrzaliznytsia railway company on the brink of cargo transportation collapse

For the past few years, the number of freight carriages has been reduced greatly resulting in millions of hryvnia losses

Ukraine's state-run railway network Ukrzaliznytsia isn't capable of performing its cargo transportation obligations. There are less than 10 thousand freight carriages left which are in a satisfactory condition to be used operationally.

The alarm bells first started ringing with grain and steel producers.

Viktor Fedorchenko has been working in Ukrzaliznytsia for many years. And says he's never seen carriages in such a terrible state.

His area of work is Kryvyi Rih mining and production complex where they load ore into carriages that have been patched and barely repaired sufficiently. But because of a gaping hole in them, a large part of the ore is lost during transportation.

Read also General Electric finalizes agreement on cooperation with Ukraine's Antonov and Ukrzaliznytsia

Grain traders have an even worse situation. The railway is the main way of transportation for them. Less than 200 carriages are serviceable right now. They add that Ukrainian grains and corn are in high demand abroad. They say they are wanting to ask lots of questions to Ukrzaliznytsia.

Vladyslav Demchyk, grain trader: How 1-3 tons are disappearing from one carriage? Or corn, one carriage contains 65 tons. Sometimes we have losses of 3-4 tons or more. The cost of one ton of corn is UAH 4,500 (about USD 200).

After a closer look at carriages, goods are disappearing not due to theft but holes in carriages. All have been fixed with wooden boards or sealing foam.

The new administration of Ukrzaliznytsia has finally started investing money into repairing old carriages. And plan to buy new ones. Next year, there will be one thousand carriages produced for the needs of the company. But this is not enough.

Read also Wojciech Balczun officially heads Ukrzaliznytsia

Leonid Kozachenko, president of the Ukrainian agricultural confederation, say there are 3 plants that make railway carriages in Ukraine. They must be loaded with orders otherwise, they will quickly disappear.

Leonid Kozachenko, president of the Ukrainian agricultural confederation: There were 5 of them, now 3. And hard to say if they will survive. 80 percent of freight carriages are worn out. For that amount, 5 years are needed to replace all of them with new ones.

Five years ago, all Ukrainian railway plants produced over 30,000 carriages per year. Some were sold abroad, another part given to Ukrzaliznytsia. Last year, only 500 were made.

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