FUE offers in 2017 to raise railway tariffs by 8.4%; 2018 – 9% in two stages

The Federation of employers of Ukraine (FEU) offers from 1 October 2017 to raise railway freight rates by 8.4% (within the actual PPI) and in 2018 to increase by 9% in two stages at 4.5% on 1 April and 1 October.
According to a post on the website of the FEU, a consolidated position has been formulated sectoral business associations, which unites enterprises of industry and agroindustrial complex of Ukraine and provide over 90% of the turnover of BONDS, reports uaprom.
“The question is finding a real compromise between the major cargo owners, authorities and the leadership of PJSC “Ukrzaliznytsia” for the economically justified size of increase of tariffs for cargo transportation by rail in 2017-2018 and subsequent years is extremely important to ensure accelerated economic growth of the state, maintain the competitiveness of domestic producers on the markets, the dynamic development of the state monopoly in the sphere of railway transport JSC “Ukrzaliznytsya” and filling state and local budgets tax revenues”, – the document says.
As noted in the FEU, any increase in tariffs must be economically justified, in particular, to focus on the price index of producers. Therefore, business representatives suggested a compromise position on the indexation of tariffs for rail transportation.
“This position is as follows: increase of tariffs by 8.4% (the actual producer price index of industrial production for 8 months of 2017 – 108,4) since 01.10.2017 year, and increased 9% in two stages at 4.5% 01.04.2018 and 01.10.2018, respectively in 2018 (the forecast price index of producers of industrial products in 2018 under Scenario 1, the approved resolution of Cabinet of 31.05.2017, No. 411 “On approval of Forecast of economic and social development of Ukraine for 2018-2020″ – 109,0)”, – emphasized in the Federation.
In FEU believe the current proposal is the most logical, balanced, and acceptable to the vast majority of owners and such that will allow to create conditions for effective work of PJSC “Ukrzaliznytsia”. Any more significant unjustified increase of tariffs will inevitably lead to destructive consequences for the economy of Ukraine.
For its part, the Federation of employers of Ukraine will initiate the Cabinet of Ministers and the Verkhovna Rada the question of the abolition or significant decrease in the rate of land tax object of “Ukrzaliznytsya” and the excise tax on fuel purchased BONDS, as well as reducing cross-subsidization of passenger traffic.
All procurement of rolling stock for railway, machinery, related products and services “Ukrzaliznytsya” should be as transparently and efficiently in the first place, manufacturers with high level of localization of production in Ukraine. Which should be appropriately reflected in the tender documents in the exercise of BONDS purchases. To achieve the above objectives when “Ukrzaliznytsya” should be established a permanent Advisory body, whose membership must include representatives of the owners and the Federation of employers of Ukraine.
In addition, the FEU note the importance of signing the joint Memorandum on cooperation between the Federation and the BONDS in which business and the state monopoly will be able to establish how strategic planning and mutually beneficial cooperation in resolving pressing issues.

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