Businesses oppose differentiated tariffs of Ukrzaliznytsia for transportation to ports
9 July 18:08
The European Business Association (EBA) has called on Ukrzaliznytsia to abandon differentiated tariffs for freight transportation. The EBA considers this initiative a threat to Ukrainian exports, "Komersant Ukrainian" reports, citing an EBA statement.
The association expressed its strong dissatisfaction with Ukrzaliznytsia’s plans to introduce differentiated increase coefficients for calculating tariffs for freight transportation to certain seaports. The business organization believes this initiative is unjustified and could cause serious damage to Ukrainian exporters and the country’s economy as a whole.
Violation of the principles of equal access
The EBA’s main claim is that the proposed changes contradict the basic principles of equal access to infrastructure and create risks of non-compliance with antitrust laws.
“The establishment of different tariffs for transportation to certain ports will actually mean interference in the formation of transportation costs, which is not in line with current legislation,”
– representatives of the EBA Logistics Committee said in a statement.
The EBA experts emphasize that according to the Law of Ukraine “On Natural Monopolies”, when setting tariffs, economically justified costs, depreciation, taxes, asset value, profitability, distance to the consumer, product quality and government support should be taken into account. In other words, tariffs should be set according to transparent and objective criteria, not just based on the direction of transportation.
In addition, according to the Charter of the Ukrainian Railways, the consumers of cargo transportation services are shippers, not seaports. Therefore, the tariff policy should be based on the principles of equal access for all shippers.
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Threat to European integration
The EBA also warns that the proposed changes could slow down the European integration of Ukraine’s transport sector. As part of the European integration process, Ukraine has committed itself to harmonizing its transport policy with the norms of the European Union.
And according to Directive 2012/34/EU on the EU’s Common Railway Area, tariffs must be transparent, economically justified and non-discriminatory. In this context, a selective increase without sufficient justification and market consultation is a deviation from these principles.
A blow to export competitiveness
The impact of the new tariffs on the competitiveness of exports, especially agricultural products, may be particularly painful for the Ukrainian economy. Amid the war, export companies in key sectors of the economy are already facing high logistics costs.
“An increase in tariffs for transportation to the busiest seaports could further hurt exports,”
– the EBA warns.
According to the business association, this could lead to an increase in the cost of Ukrainian products in foreign markets, a decrease in Ukraine’s competitiveness as an exporter, a reduction in foreign exchange earnings and a drop in the profitability of various sectors of the economy with a corresponding decrease in tax revenues.
In the long run, this may lead to a reorientation of cargo to road transport and, accordingly, a decrease in cargo turnover and the carrier’s own revenues.
Such initiatives are of particular concern to businesses given the decisions already made on the formation of tariff distances to Odesa and Chornomorsk ports. Currently, trains are being sent along a longer route, which has already increased the cost of rail transportation and raised the final price of export products.
Alternative ways of support
EBA experts emphasize that support for river or less busy ports should be provided through targeted subsidies, investments, or infrastructure development, rather than by raising tariffs for exporters.
“Business does not support any form of tariff regulation that contradicts the principles of economic competition,”
– the statement emphasizes.
The EBA insists on keeping tariffs transparent, fair, economically justified, and in line with real costs. In addition, the business community calls for maintaining state control over tariff setting to avoid conflicts of interest.
The European Business Association looks forward to the implementation of a transparent and predictable tariff policy that will meet the interests of the state and promote the sustainable development of rail transport.
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