Prevent a decision can jeopardize Ukraine's economic security due to an artificial shortage of railway wagons!

The UAC together with 15 associations, who represent the leading sectors of the economy, appealed to President Volodymyr Zelensky.

The associations stated their categorical disagreement with the initiative of the Ministry of Infrastructure of Ukraine to reduce service limit of railway wagons. Thus, according to the plans of the Ministry, the terms of continuation of operation of grain trucks from 2022 will be 30 years, and from 2028 will not be extended at all. However, this will lead to the simultaneous cancellation of about 75 thousand wagons or 43% of the working railway wagons by 2028, including 40 thousand open wagons.

"The remaining fleet will not be enough to provide rail transport. The deficit of open wagons will include about 38 thousand units, taking into account that currently the operational indicators of JSC "Ukrzaliznytsia" are deteriorating (the turnover of the open wagons is already 7.3 days), and then the deficit will increase to 48 thousand units. The existing wagon-building capacities will not be able to compensate for such a deficit in this period of time,” is mentioned in the statement.

The experts emphasize that to replace 75 thousand railway wagons by 2028, the business will need to spend UAH107 billion, and therefore other important investment and social projects will not be financed. In the agricultural sector, those are, in particular, irrigation systems that require billions of investments.

In addition, the artificial long-term shortage of railway wagons will lead to higher prices for ones, reduce industrial production and exports; catastrophic disruption of shipments of raw materials and finished products; job losses and contributions to the state budget.

Moreover, this initiative is planned to be implemented without any evidences and calculations, supported by official statistics, which would prove that the operation of wagons beyond the regulatory period is impractical for the economy. If you look at the world experience, in particular, the United States and the EU, they focus on the maximum possible extension of the wagons’ usage, while monitoring their technical condition.

Taking into account catastrophic consequences for the economy of Ukraine in the case of implementing of this initiative, the associations called on the President to instruct the Cabinet:

• to study the possible negative consequences for individual industries and the economy of Ukraine as a whole
• to set up a cross-sectoral working group and hold a professional discussion with all stakeholders
• to develop alternative effective proposals for improving the situation on the railway wagons market
• the appeal to the President was signed by: Ukrmetalurgprom Association, Ukrainian Union of Transport Employers «Federation of Transport Employers of Ukraine», Ukrainian Lime Industry Association, Ukrainian Scientific and Industrial Association «UKRKOKS», Association of enterprises of owners of departmental transport and operators of freight railway transportation "Ukrvidtrans", Ukrainian Grain Association, Ukrainian Congress of Farmers, “Agro-Food Council" PU, "Agrarian Union of Ukraine" PU, "Ukrainian Agri Council" PU, Association "Union of Poultry Farmers of Ukraine", Association "Ukrainian Club of Agrarian Business", Ukrainian Association of Direct sales, NGO "Association of Taxpayers of Ukraine" PU, "Ukrainian Federation of Security Industry" PU, "Association of Manufacturers of Ukraine" PU.