Railway sector reform includes transfer of part of Ukrzaliznytsia's functions to state agencies
The Infrastructure Ministry of Ukraine has drawn up a draft law on reforming the railway sector which foresees the transfer of part of the functions of the State Railway Administration of Ukraine (Ukrzaliznytsia) to state agencies, including to newly created ones, Head of the Reform Department at Ukrzaliznytsia Yevhen Kravtsov said while presenting the draft law.
"Today we have the State Railway Administration [Ukrzaliznytsia] which fulfills business functions, which is unacceptable and leads to the inefficiency of management and decision making. The procedure for creating the joint-stock company is to divide business functions and public management processes. After the creation of the JSC, which we expect to finish this year, Ukrzaliznytsia will have only business functions, and the public management functions will be transferred to state agencies," he said.
Kravtsov said that the strategic function of forming state policy in rail transport will be left to the Infrastructure Ministry. An agency fulfilling management functions and providing equal access to infrastructure will be created.
"It will fulfill administrative functions and keep the register of carriers. The main thing is that the agency will fulfill the functions of licensing of railway companies in connection with liberalization of the transportation market," he said.
The bill foresees the creation of the National Commission for Transport Regulation which will exercise executive power, although it would not be directly subordinated to the ministry.
"The main task of the commission is the formation of tariffs for infrastructure. This is a comprehensive issue. The main thing is to create the conditions for economically justifiable tariffs, which will be based on expenses to support infrastructure and funds that will be invested in the development of infrastructure," he said.
Kravtsov said two more agencies will be created: the agency for railway safety which will issue safety certificates, license engine drivers and independently control safety, and a commission to investigate accidents on the railways.
A sub-holding could be created within Ukrzaliznytsia which would fulfill transportation functions.
The bill foresees changes to approaches towards tariff formation. The tariff will be divided into three elements – infrastructure, traction and wagons. Commenting on traction, Kravtsov said that it is planned to liberalize the traction market when it is ready, and the market itself will regulate the tariffs. It is planned that it would take five years to finalize the process.
Infrastructure Minister Andriy Pyvovarsky added that liberalization will be gradual, and in the future this will be the only option to improve the technical state of traction.
Pyvovarsky said that the draft law foresees a new approach to the transportation of passengers in the social area to ensure that passenger transportation will break-even.
