Ukrainian Railways appeals court ruling against cargo transportation tariff hike

MOSCOW. Aug 14 (Interfax) - Ukrainian Railways has appealed a court ruling in DTEK Zahidenergo's lawsuit that did not allow Ukrainian Railways to raise cargo transportation tariffs from January 2022.

"Ukrzaliznytsia and the Restoration Ministry have lodged appeals contesting a lower-court's decision to repeal an executive order on raising cargo transportation tariffs from January 2022," Ukrainian media quoted Ukrainian Railways as saying in a statement.

The company said it has appealed the Kiev District Administrative Court's July 11, 2023 ruling, which invalidated the Infrastructure Ministry's decree changing the tariff coefficients for cargo transportation by rail.

Ukrainian Railways believes that this court ruling is unsubstantiated, is at odds with the power sharing principles and jeopardizes the country's economy and defense capabilities. Private companies that are part of a large industrial group are using it to try to bring down the tariffs to what they were in 2019, a circumstance that could to Ukrainian Railways' bankruptcy and shutdown, is fraught with catastrophic consequences and could deliver a devastating blow to Ukraine's defense potential and economy.

According to the company's estimates, repealing the decree raising cargo transportation tariffs could lead to losses up to 48 billion-67 billion hryvni amid the growth of energy prices and an increase in unprofitable cargo transportation.

"In such conditions, the carrier (Ukrainian Railways) will be unable to continue to operate, honor its financial obligations, pay salaries to its staff and provide any transport services," it said.

The Infrastructure Ministry's decree raising these tariffs was agreed with the Economy Ministry, the Finance Ministry and the State Regulation Service and was registered by the Justice Ministry, it said.

As reported, the Kiev District Administrative Court ruled in favor of DTEK Zahidenergo's lawsuit, finding the Infrastructure Ministry's October 29, 2021 decree changing the cargo coefficients for cargo transportation by rail inside Ukraine and related services unlawful and invalid. The document would have allowed Ukrainian Railways to raise its fees for transporting goods of the first tariff category by 9% from January 1, 2022.

Ukrainian Railways said then that private companies from a large industrial group were acting through courts to try to have the changes to the cargo transportation tariffs agreed and implemented back in 2021-2022 annulled. Other administrative courts are reviewing another two similar cases.