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Ukrainian Railways Warns of Possible Bankruptcy After Court Reverses Tariff Increase

Ukrainian Railways Warns of Possible Bankruptcy After Court Reverses Tariff Increase
photo: Ukrzaliznytsia / Public domain/Ukrainian Railways (Ukrzaliznytsia) logo
15 / 08 / 2024

Ukrainian Railways is facing the risk of bankruptcy after a Kyiv court overturned a key tariff increase from 2021.

The Ukrainian national rail operator expressed its concerns in a press release, stating, "Private companies are attempting to lower tariffs through the courts, which could lead to the bankruptcy and shutdown of Ukrzaliznytsia."

The court’s decision followed legal challenges from several private companies, including DTEK Zakhidenergo, a Ukrainian energy company, which successfully reversed the government’s tariff hike. In 2021, the Ministry of Infrastructure raised the tariff for first-class cargo, mainly raw materials, by adjusting the tariff coefficient from 2,204 to 2,402. This increase was intended to boost Ukrainian Railways' revenue.

In response to the ruling, Ukrainian Railways announced that it will appeal the court’s decision"The company considers this decision to be unfounded and unjustified, as the court exceeded its authority during the case review by assessing the appropriateness of the tariff changes rather than evaluating the compliance of the government authority's decision with legislative acts," the company stated.

The Kyiv court is also looking into two more related cases, which adds to the uncertainty surrounding the future of Ukrainian Railways. Already struggling due to the ongoing Russian war in Ukraine and the economic challenges caused by it, the company now faces even greater financial risks as it fights to maintain the tariff adjustments that were critical for its operations.

Source: Ukrainian Railways (Ukrzaliznytsia)

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