Ukrpromzovnishchexpertiza pointed out deep distortions in Ukrainian Railways’ tariffs

On December 2, the Verkhovna Rada Committee on Economic Development held hearings on the tariff policy of the state monopolies Ukrainian Railways (UZ) and Ukrenergo. During the meeting, representatives of the state-owned enterprise Ukrpromzovnishchexpertiza — head Volodymyr Vlasyuk and deputy director SerhiyPovazhnyuk — presented the results of research on the impact of tariff decisions on industry, logistics, and the economy.

The discussion focused on potential increases in tariffs for freight rail transport in 2025-2026, reforming the transport system and asset management of Ukrainian Railways, as well as the possible division of the company by type of activity. Experts emphasized that the current tariff model contains significant distortions that do not comply with European approaches.

According to Vlasyuk, in the EU, railways are primarily infrastructure for passenger and industrial transport, rather than a tool for maximizing profits. He cited the example of Poland and Germany, where passenger transport operates with moderate profitability, while in Ukraine its margin reaches -150% EBITDA. At the same time, the freight segment in Ukraine provides an excessively high margin of 38-40%, which is many times higher than normal European practice.

The expert noted that the freight base of Ukrainian Railways is rapidly shrinking. Steel production in Ukraine has fallen from 43 million to 6 million tons. With such volumes, any increase in tariffs becomes disproportionately burdensome for industry. In addition, the correlation between tariff increases and a decrease in transportation is 0.98—in effect, an automatic shift of cargo to road transport.

Vasyuk emphasized that isolated solutions will not solve the problem. A comprehensive 3-5 year strategy is needed with clear financial models, a review of UZ reserves, and the introduction of modern solutions in suburban transport.

Following the hearings, the Committee announced that it would prepare recommendations to the government on updating tariff policy and increasing the transparency of state monopolies.

Earlier, UkrFA appealed to the authorities not to allow another increase in Ukrenergo’s tariffs for next year. They stressed that such changes would be another blow to the domestic electrometallurgical industry, for which the cost of electricity is the main factor in the cost of production.

According to the association’s estimates, the increase in tariffs will lead to a significant increase in enterprises’ costs, a loss of competitiveness in foreign markets, and may cause the shutdown of individual units or even entire workshops.