Andrii Pyvovarsky: A new bill On railway transport to introduce paramount changes in rail domain

Minister of Infrastructure Andrii Pyvovarsky announced at a briefing at the Government House, on June 3. The draft law presented during the event was designed by specialists of the Infrastructure Ministry and Ukrzaliznytsia, as well as European experts of the Twinning project. The document had also passed the discussion with railway union teams and the Federation of transport employers. The bill is designed to solve a number of problems that have accumulated in the branch over decades of underinvestment and mismanagement and to become a new page in the history of railway transport.

"Throughout the independence years, the railroad was deprived of proper funding. Combined with poor management and constant subsidising for transportation of privileged categories and corruption at different levels, this has led to over 80% depreciation of basic industry’s assets. The activity of Ukrzaliznysia as it exists now proves ineffective. The new draft law will completely change an approach to the organization of railway carriage. We plan to provide a competitive market for railway operators, to increase investment attractiveness of such enterprises and to improve the quality of transport services for passengers," said Minister of Infrastructure Andrii Pyvovarsky.

The draft Law envisages creating a new model of state administration in railway transport in Ukraine. The Ministry of Infrastructure will preserve the functions of state policy formation and drafting laws. A State Agency of railway transport is to be set up to ensure implementation of the national policy in the sector, to monitor equal access to infrastructure, to register and coordinate the activities of carriers. The state function to supervise over the safety of traffic shall be exercised by State transport safety authority, while a separate Commission shall deal with independent investigation of accidents on the railroad.

Another novelty is a new approach to tariff forming in railway transport. From now on, the rate will consist of specifically defined components: infrastructure, rolling stock and traction. The infrastructure component of the tariff will contain an investment component. The funds collected for infrastructure will be spend on maintenance, while the investment component of the tariff will be directed on financing investment projects to develop infrastructure of the railway. For passengers, this will mean improving the quality of services and safety of rail transportation.

Ukrzaliznytsya will remain the main public operator of the railway infrastructure in Ukraine and will continue to manage the entire public infrastructure. The bill envisages equal access to the infrastructure for all market participants. The Ministry of Infrastructure believes that this will expand the opportunities for entrepreneurship in this sector and will contribute to the formation of modern market relations in railway carriages.

In addition, the bill provides a new approach to the organization of passenger transportations in social segment, which, in particular, will introduce a concept of orders and contracts for social transport. The Minister added that it would provide funds to invest in the renovation of rolling stock and improving the quality of services.

It is expected that by October this year, the draft law "On railway transport" will have been submitted to the Parliament and will be approved by the Verkhovna Rada of Ukraine by the year’s end.