The largest metallurgical companies, including "ArcelorMittal Kryvyi Rih," "Zaporizhstal," and six mining and processing plants, are urging the Minister for Communities and Territories Development (MinRegion) Oleksiy Kuleba to deny "Ukrzaliznytsia" its proposal to raise freight transport tariffs by 37% and to impose a moratorium on any increases until the end of this year.
"The current situation is extremely unfavorable for increasing freight railway tariffs, as the impact of the war on the mining and metallurgical enterprises and the already high logistics costs are constantly bringing closer the time when the consequences for the industry will become irreversible," the letter states, which was reviewed by the Interfax-Ukraine agency.
According to the authors of the letter, "Ukrzaliznytsia" and MinRegion have already begun preparing a draft order to raise freight transport tariffs by 37%.
In this regard, the metallurgical enterprises note that their condition has sharply deteriorated over the years of the war, particularly due to power outages and rising energy costs, a labor shortage caused by mobilization and migration, as well as falling prices and production volumes.
Furthermore, the share of the mining and metallurgical complex in GDP has decreased from 10% in 2021 to 5.7% in 2023, export revenue has fallen from $22 billion in 2021 to $5 billion in 2023, and $4 billion over the first eight months of 2024, while the number of employed has dropped from over 130,000 to more than 60,000.
At the same time, it is noted that the industry still accounts for about 40% of "Ukrzaliznytsia" freight transport and the handling at seaports.
The authors of the letter called on MinRegion to assist "Ukrzaliznytsia" in finding internal reserves to optimize costs and enhance efficiency, as well as to appeal to the Cabinet of Ministers to reconsider the owner's waiting list to prevent the adoption of the financial plan of the state railway monopoly that includes tariff increases.
"Currently, "Ukrzaliznytsia" has every opportunity to maintain the current level of freight tariffs by optimizing expenses and restoring the freight base while remaining profitable. We urge the minister to consider that an increase in railway tariffs for freight transport under current conditions is unacceptable and to impose a moratorium on raising freight transport tariffs of "Ukrzaliznytsia" until the end of the war," the letter emphasizes.