The Cabinet approved a railway reform: the transport market will be opened to competition

The Cabinet approved a roadmap for railway transport reform that provides for the gradual introduction of competition in freight and passenger transport. Carriers will be given access to railway infrastructure under common rules, and the tariff system and funding for passenger routes are planned to be changed.

This was reported by Dilo from

a statement by the Ministry of Restoration, Infrastructure and

Transport of Ukraine.

The market opening is planned to be carried out in stages and separately for

freight and passenger transport. Different approaches are also envisaged for

the main Ukrainian gauge 1520 mm and the European gauge 1435 mm.

For cargo owners the reform potentially means the possibility of

choosing between different carriers. However, the actual launch of competition will depend

on the adoption of the necessary laws and subordinate acts.

Passenger transport will be financed under a different model

A separate block of the reform concerns loss-making passenger

routes. The government plans to gradually abandon the model under which their costs

are covered by revenues from freight transport.

For socially important routes a PSO mechanism is envisaged —

the state or another contracting authority will determine the required services and separately

finance them under a contract.

This should separate the financing of the freight and passenger

segments and make the costs for socially important routes separate and

transparent.

Tariffs and access to tracks will be revised

The reform also provides for new rules for payment for the use of

railway infrastructure. They should be the same for carriers who

gain access to the network.

At the same time, Ukraine must move to European requirements for

safety, operator certification and rolling stock admission. This is part of

the integration of the Ukrainian railway into the EU transport market.

Recall that earlier Ukrzaliznytsia had already been working on

allowing private locomotives for freight transport. At that time a full

launch of private traction was hindered by the lack of the necessary legislative framework.