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PKP's strong reaction to the conflict with Ukraine over rail freight transit

PKP's strong reaction to the conflict with Ukraine over rail freight transit
photo: PKP press materials/PKP's strong reaction to the conflict with Ukraine over rail freight transit
26 / 01 / 2022

The Polish side expects an immediate withdrawal of hostilities by Ukraine and the lifting of restrictions imposed. On 18 January 2022, at a specially convened press conference, the PKP Group executives did not hide their dissatisfaction. They criticized the restrictions due to the blockage of rail freight transit from China, the Baltics, and CIS countries to Poland via the territory of Ukraine. Last December alone, nearly 90 trains were affected by these restrictions.

As the official reason for the imposed transport restrictions towards Poland, Ukrainian Railways cited the limited capacity of the Ukrainian railway network and the accumulation of shipments waiting to be moved from U.Z. to PKP, only that during consultations with the Chairman of the Board of Directors of PKP S.A., U.Z. revealed that such obstacles do not exist. The authorities informed the Polish side that lifting the imposed restrictions is beyond the competence of the Ukrainian railway administration. PKP representatives pointed out that the same limits initially applied to transit towards Slovakia, the Czech Republic, and Austria. Still, after a few days, these restrictions were lifted and currently apply only to Poland, Ukraine's largest European trading partner.

We are surprised by the Ukrainian side's unilateral introduction of traffic restrictions. The suspension of transit, including the New Silk Road, is unprecedented. Poland is Ukraine's largest trading partner in Europe. Poland mainly imports raw materials, metal products, and vegetable products. A significant part of these cargoes reaches Poland by rail. We have been cooperating closely with Ukrainian Railways for many years, and our disappointment is all the more critical because the introduced closure violates the international agreement on international rail freight transport (SMGS) and bilateral agreements in the field of rail transport - said Andrzej Olszewski, member of the Board of Directors of PKP S.A.

At the press conference, the Polish side presented statistics showing that in the first ten months of 2021, the value of Polish imports increased by 68% and reached USD 4.4 billion. This is almost twice as much as Ukraine's exports to Russia and three times as much as exports to Ukraine's other neighbors - Hungary and Slovakia. Transport from China via Ukraine to Poland, launched in early 2020, also grew dynamically in its second year of operation. In 2020, 40 trains started, while in 2021, it was already 124 trains. The service plan for December 2021 included 87 trains from China and six trains to China. The dynamic development of this project came to a complete halt due to the blocking of transit through  Ukraine.

- Ukrainian Railways is our crucial trading partner. Thanks to the development of transport towards the terminal in Sławków, the traffic volume and revenues of Ukrainian Railways are growing. In 20 years of operation, PKP LHS has invested over PLN 1 billion in fleet modernization and infrastructure expansion. We hope that our Ukrainian partners will unblock transit, as they are its primary beneficiary - says Zbigniew Tracichleb, Chairman of the Board of PKP LHS.

- The development of international connections on the New Silk Road is an excellent opportunity for Ukraine. There are new costs, new jobs, new opportunities for Ukrainian businesses, and revenue for the state budget and Ukrainian Railways. Considering that the length of the route in Ukraine reaches approximately 1,000 kilometers and the duration of transport in Poland up to 400 km, We can conclude that Ukrainian Railways is the primary recipient of transit transport to Poland. Restrictions imposed overnight are also incomprehensible to Chinese and European trading partners and should not be used in trade cooperation - summarised Władysław Szczepkowski, interim CEO of state carrier PKP CARGO S.A.