Ukrainian Railways, Ukraine’s state railway company, has announced a net loss of UAH 7.2 bln for the first nine months of the year, highlighting the financial strain the company is facing. The loss is exacerbated by a 49% decline in freight traffic since 2021, which has left the company unable to subsidize its loss-making passenger transport operations through freight revenues. The company has now proposed a 41.5% increase in freight tariffs for 2026, with the hike to be implemented in two stages, to cover the financial shortfall.
Deputy Chairman Serhiy Leschenko of Ukrzaliznytsia has called for budgetary support to help the company address the financial challenges it is facing. The need for such support is due to the inability of the company to sustain its operations without additional funding, as the loss-making passenger transport sector continues to consume significant resources. The government is expected to consider the budgetary aid request, given the critical role of Ukrzaliznytsia in transporting goods and people across Ukraine.
The proposed freight tariff increase is likely to have both positive and negative implications for the economy. On one hand, it could help reduce the financial burden on the state railway company, allowing it to invest in necessary infrastructure and services. On the other hand, it may increase the cost of transporting goods, potentially leading to higher prices for consumers and businesses. Therefore, the government and stakeholders must carefully evaluate the potential economic impact of the proposed tariff increase.
As Ukrzaliznytsia continues to navigate these financial challenges, the company’s ability to implement the proposed reforms and secure the necessary budgetary support will be crucial in determining its long-term viability. The situation also highlights the broader economic challenges facing Ukraine, particularly in balancing the needs of the state-owned enterprises with the financial responsibilities of the government.