PHOTO:UNIAN
There are many reasons for this problem, but here are the key ones
- Tickets are below cost
- The underperformance of the Ukrzaliznytsia
- Toll evaders
- Concessionary fares
- Plundering
Unfortunately, today in Ukraine the railway ticket prices have long lagged behind the market and have become unprofitable for UZ.
The increase in prices is constrained because Ukrzaliznytsia is a state monopolist. As a result, not only the UZ does not make a profit, but also related industries that are not able to compete on the ticket price have a shortfall in profits or losses.
This is one of the reasons why domestic airlines do not really work in Ukraine, despite the considerable territory: because this market is constrained by low prices for railway tickets. The same applies to bus transportation.
Conclusion: Ukrzaliznytsia today is an extremely inefficient monopolist, and is an albatross around the necks of other modes of transport.
Volodymyr Shulmeister, director of the UIF Infrastructure programme.
First published: Liga.Business
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