Ukraine: Ukrzaliznytsia proposal to Ukrcement in light of corruption claims

According to Ukrzaliznytsia board member, Marek Zalesny, Ukrzaliznytsia has applied the automated wagon distribution system to cement carriers and invites the Ukrcement association to jointly participate in the system.

"The automated distribution system has been applied to this group of wagons [cement carriers] to avoid corruption. I invite the association to jointly participate in the wagon distribution system, as we do not have own shipping firms," Mr Zalensy said on Tuesday.

In response to comments by Miguel Machado, chairman of Ukrcement Association, that Ukrzaliznytsia must demonstrate success in tackling corruption before it increases cargo transportation tariffs, Mr Zalesny said corruption in distribution would remain until there were enough wagons.

Mr Machado also said that growth of Ukrzaliznytsia's tariffs annually exceeds the inflation pace: “Each increase of the tariffs is more than inflation, and in 10 years its growth pace is 50 per cent more than inflation, while servicing has worsened."

In turn, Mr Zalesny noted that the Ukrzaliznytsia's tariffs did not exceed the pace of growth of industrial prices: “Growth of industrial prices in 2016 was 31 per cent  with 8-10 per cent of inflation, and in 2015 the 31 per cent growth was recorded. We increased the tariffs over the period by 30 per cent and 15 per cent.”