: :inin Kyiv (EET)

Ukraine smelts 3 mln tonnes of steel less in H2 2016 due to railcar shortage

Head of the Ukrmetprom Association Oleksandr Kalenkov says Ukrainian steelmakers smelted about 3 million tonnes of steel less in the second half of 2016 due to JSC Ukrzaliznytsia (UZ) railways operator`s bad performance, according to the Ukrainian-based media outlet RBC-Ukraine.

”In the second half of the year, Ukrzaliznytsia`s operation was the worst in recent years. Ukraine`s mining and metal sector failed to produce nearly 3 million tonnes of steel, while the state lost billions of hryvnias in tax payments and millions of dollars in forex receipts,” Kalenkov said, RBC-Ukraine wrote.

He also noted that the structure of UZ tariffs is not transparent.

”We are told that the [tariff] rates are low, but they mention 35-50% freight transportation profitability in presentations for European investors. Thus, using its monopoly position, the railways subsidize passenger transportation,” Kalenkov said.

Economist for IMF Group Mykhailo Kukhar in turn claims that domestic steelmakers will continue facing such problems until the UZ starts buying more railcars in large quantities.

”Purchases of large batches of railcars from domestic manufacturers would allow Ukraine not to reduce exports due to transportation problems. After all, it is unacceptable that amid the crisis and war, we lose from 2% to 10% of exports in the basic industries due to the fact that we simply could not ship these products out of the country,” the expert said.


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