The government has allowed Ukrainian Railways to sell scrap and crushed stone

The Cabinet of Ministers has simplified the procedure for disposing of property for Ukrainian Railways (UZ). This is stated in the report of the Ministry of Communities and Territories Development.

From now on, the company can independently, without government approval, make decisions on the alienation of property if its book value does not exceed UAH 500 million. This, among other things, will allow the company to start selling its accumulated scrap and crushed stone products.

The decision is expected to enable UZ to receive more than 218.6 thousand tons of ferrous scrap (worth UAH 1.6 billion) and 3.8 thousand tons of non-ferrous scrap (worth UAH 233.4 million).

“In addition to additional revenue, this decision is also of practical importance. Decommissioned railcars, equipment and other materials will not accumulate on the tracks, which will improve traffic safety. The sale of scrap will also provide Ukrainian industry with scarce raw materials,” the ministry said.

The ministry notes that previously, the sale of written-off property was difficult. Due to a decision that required government approval, the process was delayed, slowing down the company’s operations and making it impossible to manage resources effectively.

This is the second such step by the Cabinet of Ministers – in October last year, UZ was granted the right to lease property on a competitive basis if its book value does not exceed UAH 500 million.

Ukrainian Railways has not sold scrap to the domestic market of Ukraine through auctions in the Prozorro.Sale system for more than 1.5 years. The last time the raw materials were put up for auction was in September 2023.

As UZ is the largest state-owned company generating scrap, with annual sales of around 10-13% of domestic consumption, the prolonged lack of sales poses a real threat to the Ukrainian steel industry. In 2023, the company sold only 76.4 thousand tons of this raw material, while in 2022 it sold 113 thousand tons against the target of 170 thousand tons.