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Ukraine plans railway sector reform

17 Jun 2015

UKRAINE: Minister of Infrastructure Andrii Pyvovarsky has presented a draft bill for the reform of the rail sector and a plan to restructure the management of national railway UZ. The bill is to be submitted to parliament by October, with approval expected by the end of the year.

Pyvovarsky said the current structure of UZ is ineffective, citing accumulated problems of underfunding, poor management, subsidy policies and corruption. The reform plans have been drawn up by the Ministry of Infrastructure and UZ in consultation with European advisors and trades unions, and aim to ‘provide a competitive market for railway operators, to increase the attractiveness of investment in such enterprises and to improve the quality of services for passengers’.

Under the plans, the Ministry of Infrastructure would be responsible for policy. A state railway agency would be formed to regulate the industry and register operators, with a safety authority and an independent accident investigation body also to be established.

UZ would continue to manage the public rail infrastructure, which operators would be able to access on an equal basis. The Ministry of Infrastructure believes this would provide opportunities for entrepreneurship and help create a modern rolling stock market.

UZ would have a clearly-defined triple management structure, with the cabinet and Ministry of Infrastructure responsible for overall strategy, a supervisory board including international experts responsible for business decisions, and a management board responsible for operational matters.

Future tariffs would comprise distinct infrastructure, rolling stock and traction components, with the infrastructure component including both maintenance and investment elements.

In the passenger sector public service obligation contracts would be introduced, and used to fund rolling stock modernisation and improvements to service quality.