Ukrainian Railways plans to cut 60 thousand worn-out railcars for scrap

Ukrainian Railways (UZ) may write off up to 60 thousand worn-out (“extended”) freight cars, which will give impetus to the renewal of rolling stock and provide the steel industry with raw materials. This was stated by Valery Tkachev, Deputy Director of the Commercial Department of UZ, during the Metal Expert conference “Ferrous Metallurgy of Ukraine 2025”.

“We really need new railcars, locomotives and investments in infrastructure. But, unfortunately, we do not have sufficient funding,” he said.

UZ appealed to the Ministry of Community Development, Territories and Infrastructure to cancel orders No. 62 and No. 267, which currently block the write-off of old rolling stock. If the amendments are approved, the company will be able to scrap up to 60,000 railcars, of which about 40,000 belong to Ukrainian Railways itself and another 20,000 to private companies.

The scrap can be used in the domestic steel industry and the proceeds can be used to purchase new railcars.

“This is extremely important for the Ukrainian economy, as well as for our company, steelmakers and railcar builders,” emphasized the UZ representative.

Ukrainian Railways has not been selling scrap to the domestic market of Ukraine through auctions in the Prozorro.Sale system for about two years. The last time raw materials were put up for auction was in September 2023. In the first 9 months of that year, the railroad operator sold only 76.4 thousand tons of scrap, while in 2022 it sold 113 thousand tons against the target of 170 thousand tons.

Since UZ is the largest state-owned company producing scrap, with annual sales of about 10-13% of domestic consumption, the prolonged lack of sales poses a real threat to the Ukrainian steel industry. The reasons for the abstention include attempts to obtain permission to export raw materials, which were not approved by the Cabinet of Ministers, and allegations of regulatory deficiencies, which were refuted by the government.

Recently, the Cabinet of Ministers simplified the procedure for disposing of property for Ukrainian Railways, according to which the company can independently, without government approval, decide on the alienation of property if its carrying value does not exceed UAH 500 million.

This decision is expected to allow UZ to receive over 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).