The main argument from "Ukrzaliznytsia" regarding the necessity of raising tariffs is the increase in expenses since the last indexing and a rise in the producer price index for industrial products by 176.4%.
"However, this motivation is absurd. It is precisely the increase in tariffs by state monopolies and "Ukrzaliznytsia" that leads to a rise in prices for industrial producers – as logistics costs increase, businesses raise their product prices to cover these costs," emphasized GMK Center.
Indeed, prices for products from Ukrainian industrial producers have risen, but in the context of war, all types of costs have significantly increased.
"Relying solely on the rise in producer prices seems somewhat incorrect. Following this logic, for instance, when producer prices fell by 7.4% in 2020, "Ukrzaliznytsia" should have correspondingly reduced freight tariffs. However, at no point over all these years has "Ukrzaliznytsia" ever adjusted tariffs downward, regardless of economic events," noted Alena Lebedeva, owner of Aurum Group.
Another argument from "Ukrzaliznytsia" is the lack of sufficient funding for the repair of rolling stock and infrastructure. By the end of 2024, the company plans to repair 1,200 km of tracks, which is the minimum necessary for normal operations. However, the increase in UZ tariffs is often justified by the need to attract more investments into infrastructure, although at best, the execution of the investment plan is limited to 50-60%.
"An additional motive for "Ukrzaliznytsia" is to maintain profitable operations. However, the company is already achieving this without tariff indexing. By the end of the third quarter of 2024, net profit amounted to 1.66 billion UAH. Few companies in Ukraine can currently boast of profitable operations. So why should a state company be guaranteed to receive super-profits when businesses are operating at a loss and on the brink of survival? – This has not been explained to anyone," GMK Center concluded.