The government has developed a step-by-step plan for reforming Ukrzaliznytsia by opening the market to private companies

The Cabinet of Ministers is refining the reform plan for the company "Ukrzaliznytsia," which includes a timetable of changes and deadlines for opening the railway market to private investments. Approval of this document is one of the criteria for Ukraine to receive financial support from the European Union.

This is reported by Dilo, citing material from Ukrinform.

As stated by the first deputy minister for recovery, infrastructure, and transport, Serhiy Derkach, during a panel discussion at the forum "Regional Dialogues with Business on European Integration," the document envisions a phased implementation of all European railway operation standards.

The state is already taking the first steps in this direction. Work is ongoing on building an EU-standard rail gauge, price regulation for tickets in high-speed rail carriages and in the first class of the Intercity, and basic elements of state compensation for passenger transport are being introduced.

Main obstacles to launching private operators

Full emergence of private carriers on railway routes is hampered by several factors:

security concerns, which cause foreign operators to fear entering Ukraine with their own rolling stock even within pilot projects;

lack of long-term financing for investors due to war risks;

an outdated model of favorable carriage, where, due to an imperfect compensation system, the passenger sector remains loss-making and commercially unattractive.

Problem with legislation

For full market liberalization, the Verkhovna Rada previously adopted only the security-related block of rules — the law "On Safety and Interoperability in Ukraine's Railway Transport".

As noted by Yuliya Sirko, deputy chair of the parliamentary committee on transport and infrastructure, the bill had to be split in half, since votes for full market opening in parliament are currently lacking.

At the same time, she stressed that allowing private capital and private traction is a vitally necessary step in light of Russian attacks. The state will not be able to finance a rapid recovery of damaged locomotives on its own while also rebuilding roads and bridges.

As a reminder, it was previously reported that partners would help restore damaged UZ trains, for which Ukraine is mobilizing more than $240 million. The Ministry of Infrastructure, together with Ukrzaliznytsia, has begun forming an international coalition of partners to restore the locomotive fleet and strengthen the energy independence of the railway network.