Tariffs of “Ukrzaliznytsia” for rail freight kills exports of food industry

Feb 12 2019 published c Uncategorized, earnings, news

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Regular increase of “Ukrzaliznytsia” for rail freight kills exports of food industry, says president of the association “Ukrkondprom” Oleksandr Baldyniuk. This is stated in article “Ukrzaliznytsia” inflates rate: Business warns of economic slowdown112.among others.

According to the president of association “Ukrkondprom”, only confectionery exports for 4 years have already lost 60 thousand tons due to the increase of tariffs and protectionist actions of Russia.

Commenting on the provision of “Ukrzaliznytsia” the right to automatically index tariffs on rail freight for the index of industrial producers' prices, said Baldyniuk, it would negatively affect both business , and the economy as a whole. As an example, he cited the situation with the granting of US rights to self-determine the rate for the use of wagons. According to Baldyniuk, the share of the state monopolist only in covered wagons (used to transport food) reaches 78%.

According to Baldyniuk, while the rate is determined by the formula, at least two of its components (profitability and discount) are determined by the UZ itself. Thus, only last year the rate increased three times and grew from the original size six times, said the president of the association “Ukrkondprom”. “It actually kills exports of the food industry, taking into account the transit war with Russia, which illegally blocks transit in its territory, blocking access to Ukrainian products to Central Asian markets”, – he said.

According to Baldyniuk, Ukrainian producers are forced to use alternative routes through the Black Sea and Caspian ferry crossings, which is 2,5 times more, expensive than to carry through the territory of Russia. “All this negatively affects the trade presence of Ukrainian products in the markets. Only confectionery exports for 4 years have already lost 60 th. tons”, – he said.

Recall, that the Cabinet intends to approve the initiative “Ukrzaliznytsia” on the introduction of automatic indexation of tariffs for freight traffic to the index of industrial prices. This means, that the state monopoly “Ukrzaliznytsia” will be able to arbitrarily change tariff rates in the direction of increase, reviewing them quarterly. Previously, each regular increase was asserted by the Cabinet of Ministers

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