Iryna Kosse on the reform of Ukrzaliznytsia – commentary for “Ekonomichna Pravda”

Ukraine is embarking on one of the most far-reaching reforms of its transport sector in decades. A new law aligning the country’s railway legislation with EU rules provides for the separation of Ukrzaliznytsia into an infrastructure operator and a railway operator. At the same time, the reform has raised an important question: could this be the first step towards the company’s privatisation?

While the law guarantees that the infrastructure operator will remain fully state-owned, it does not define the future ownership structure of the railway operator, which will receive the company’s locomotives and rolling stock. This has fuelled debate over the potential role of private capital in the sector.

Iryna Kosse, Lead Researcher at the Institute for Economic Research and Policy Consulting (IER), believes that the most realistic model for Ukraine is a publicly owned passenger railway operator supported through Public Service Obligation (PSO) compensation from the state or local budgets, rather than the sale of Ukrzaliznytsia. At the same time, she argues that private railway operators could emerge on the most commercially attractive routes once the market is opened.

In her commentary for “Ekonomichna Pravda”, Iryna Kosse discusses whether the reform brings Ukrzaliznytsia closer to privatisation, how the new market model could operate, and what role private capital may play in the future development of Ukraine’s railway sector.

Read the full commentary via the link.