“Ukrzaliznytsya” has a resource and opportunity not to raise tariffs.
“Ukrzaliznytsya” has the resources and opportunities to increase rail freight rates in 2017.
This is stated in the letter of the President of the American chamber of Commerce Andrew Gunder on behalf of the Minister of infrastructure Volodymyr Omelyan.
In particular, A. gunder drew the attention of the Minister, according to the order of the Ministry №782 dated 8 October 2013, the tariffs are subject to revision in case the income from ordinary activities does not provide reimbursement of current expenses of the Railways, or if they do not have enough funds for the implementation of the capital investment required to Finance the investment program.
A. gunder noted that the first condition is characterized by earnings before taxes, interest, depreciation and amortization (EBITDA), which is to have the plan value +17,5 billion UAH. without taking into account indexation of the rate that indicates the ability of “Ukrzaliznytsya” to Fund operations in 2017 .
“As for the second condition, I would like to draw Your attention to the planned “capital investment” UAH 22.7 bn., 15, 8 billion UAH. more than the fact of 2016. On a reported basis for 5 months. 2017 capex was allocated 2 billion UAH. (9% of the annual planned budget). It is worth mentioning that at the beginning of the year in the accounts of “ME” was about 7 billion UAH. which was enough to Finance 44% of the investment, which the Cabinet of Ministers of Ukraine allowed “ME” without the approval of the financial plan. Given the actual data of the use of investments in previous years, the planned volume of investments is impossible to learn effectively”, – he said.
According to experts of the member companies of the American chamber of Commerce, prior to any increase in rail tariffs “Ukrzaliznytsya” should show the result from the previous increase, in particular in the context of the situation with the distribution of cars, their turnover, speed of delivery and safety of cargo. A. gunder also expressed confidence that the next step should be to develop a clear plan for further improvement of restoration/repair of wagon and locomotive fleet, “UZ”, speed shipments of goods by rail, availability of fuel, investment in rolling stock “UZ”, etc. with a clear timeline and metrics.
“Based on the above, the experts of the companies-members of the house appeal to You, dear Vladimir Vladimirovich, with the request not to support the increase of rail freight, as such an increase was premature and unreasonable, and accordingly, to finalize the draft consolidated financial plan “ME” in 2017″, – said in the letter.
In turn, the Executive Director of the European business Association Galina Derevyanko emphasizes that the increase in rail freight tariffs of 22.5% may have a negative impact on individual sectors of the Ukrainian economy, including medium – and long-term competitiveness of the industry and agroindustrial complex of Ukraine.
In this regard, members of the Committee of European business Association find it necessary to conduct a more thorough analysis of the impact of tariff increases on the economy of Ukraine and to compare the effect of attracting the necessary volume of revenues to Ukrzaliznytsia. They also consider it necessary to consider alternative sources of financing “Railways”.
In addition, members of the Committee of the European business Association stated the need to analyze possible negative consequences for “Railways” due to the fall in traffic in case of increase of tariffs for transfer of cargo by road and river transport.
As earlier reported, the industrial associations have appealed to the Prime Minister of Ukraine Volodymyr Groisman with a request to instruct the Railways to refrain from raising freight rail tariffs by the end of this year.
The letter, signed by leaders of the Federation of metallurgists of Ukraine, OP “Ukrmetallurgprom”, Association of manufacturers of ferroalloys “Ukrainian Academy of pharmacy”, Association “Ukrcement” and “Ukrtel”, it was emphasized that to improve freight rail rates today there is no economic justification.
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