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The business warned about the consequences of rising rail freight prices

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The Ministry of Infrastructure decided to increase the tariffs of Ukrzaliznytsia by 70%, which could lead to the collapse of major industries in a crisis during the war.

Ukrainian business warns about the negative impact on the industry of the decision of the Ministry of Infrastructure to increase the tariffs of Ukrzaliznytsia for freight transportation by 70%. The position of the industry is voiced by the European Business Association.

“Of course, Ukrzaliznytsia, like other industries and sectors, has suffered major damage as a result of military operations and needs financial support. However, compensation for this damage can not be assigned only to business – difficult for everyone now, and for everyone there are losses, ”he said. EBA Executive Director Anna Derevianko.

The EBA states that raising rail freight rates could lead to the collapse of key industries.

It has been noticed that due to the blocking of ports, logistics has risen significantly in price, and the increase in tariffs on rail transport could lead to a complete cessation of businesses still running, whose freight work has already fallen. .

The Association also recalls that rail tariffs for goods such as coal, cement, ore, fertilizers have increased by 42% since January 1, 2022, which will lead to at least UAH 2.9 billion additional costs in transportation by the end of 2022. Due to the new increase in tariffs, their delivery will be unprofitable for both business and UZ.

The problem remains unresolved with the queue of wagons on the western border, which is at about 40,000 wagons, and 21% of the goods waiting to cross the border were shipped more than 30 days ago and are still waiting for their transition. The declared capacity of 3.4 thousand wagons per day is not being met. Significant transportation problems are also observed in domestic traffic.

In addition, the increase in tariffs could lead to a closure of businesses in the coal industry, in particular, 40% of operating mines will be forced to stop production due to the increase in the cost of production and transportation of products. As a result of the closure of the mines, approximately 7.6 thousand workers will be laid off/reduced. It will also affect the energy industry. In particular, in the absence of sufficient amount of coal in the warehouses of thermal power plants, the stable passage of the autumn-winter heating season of 2022-2023 may be in jeopardy.

The EBA appeal was sent to the heads of the Office of the President, Regulatory Service, Antimonopoly Committee, Ukrzaliznytsia and Ministry of Infrastructure. Businesses called for the cancellation of the decision to increase tariffs for rail transportation and initiate a moratorium for the duration of martial law and 12 months after its completion.

Earlier, the CEO of Metinvest Yuriy Ryzhenkov called the logistics problem the main one for economic development in conditions of war – the export of products of Ukrainian businesses has become unprofitable due to a significant increase on the cost of delivering the products.

Because of this problem, Metinvest began to stop or reduce the activity of its businesses.

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Source: korrespondent

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