Chamber News (#05 May 2017)

Chamber Survey on the Effectiveness of Ukrainian Railway Activities in 2016

The American Chamber of Commerce in Ukraine conducted among its Member Companies a survey on the effectiveness of Ukrainian Railways activities in 2016. On the basis of the results, 54% of respondents believe that conditions in the railway freight transportation sphere worsened in 2016. In addition, 61% of respondents assess Ukrainian Railway measures in the fight against corruption as ineffective.

The major areas of reform of Ukrainian Railways were determined as fighting corruption (84% of respondents), change in the system and methodology for setting railway tariffs (55%), elaboration of a new comprehensive strategy for the development of rail transport (42%), and formation of an independent body on adjustment of railway tariffs (39%).

While estimating the transparency of the procedure of calculation of railway tariff, 90% of respondents noted that it was opaque, and the system should be reformed in areas like the following: creation of a public, automated system for calculation of tariffs (68%), division for infrastructure, investment and rail car components (65%), simplification and standardization of the system of additional fees (48%), application of a discount system for tariffs with clear requirements for their receipt (45%), and establishment of single tariffs for all participants of the transportation process (36%).

“Realizing that the situation in the sphere of railway cargo transportation has deteriorated in 2016, the Chamber’s experts developed a number of proposals for its improvement. Ensuring a transparent mechanism for distribution of railcars, taking into account seasonal peak loads on rail transport and public discussion of plans for the implementation of capital investments are among the main factors that will contribute to the successful activities of Ukrzaliznytsia in future. At the same time, an effective dialogue with the business community should remain one of the main instruments of cooperation to address pressing issues in the railway sphere”, Andy Hunder, President of the American Chamber of Commerce in Ukraine, pointed out.

Summing up, the business community expressed the need for regular reports by senior management of Ukrainian Railway to investors dedicated to the implementation of capital investment programs. It is expected that this step will have a positive effect on the establishment of transparency of financial flows.

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