Abstract
If the Ukrainian economy is to be successfully restructured going forward, a restructured railway system will have to be part of the picture. Ukraine’s economy depends on the production and sale of a number of bulk commodities, including coal, iron ore, steel, and agricultural products, that require shipment by rail in order to reach both domestic and export markets economically. In this paper we first discuss in more detail the crucial role that UZ plays in the Ukrainian economy. We follow with a survey of the world experience with railways restructuring: a large number of countries have already undertaken the task of converting aging government-owned monopoly railways into more dynamic and competitive transport enterprises, and their experience in very diverse settings may have important lessons to offer. We then examine the current state of rail reform plans in Ukraine. We conclude with discussions of an alternative path forward that seems most likely to be successful in Ukraine, based on both the experience elsewhere and the country’s current situation.
Highlights
If the Ukrainian economy is to be successfully restructured going forward, a restructured railway system will have to be part of the picture
Attracting private sector participation, in turn, will likely require a restructuring strategy that relies on market forces and competition rather than government decision makers to direct strategy and operations into the future
We examine the current state of rail reform plans in Ukraine
Summary
If the Ukrainian economy is to be successfully restructured going forward, a restructured railway system will have to be part of the picture. The Ukrainian Railway – Ukrzaliznytsia, UZ – was formed as a joint stock company in 2015 from what had been six separate regional railways, each with a good deal of autonomy. An important first step in creating a viable railway going forward will be to find ways to attract investment into the system. Given competing demands on government resources, the international experience suggests that this will likely have to focus on private sector participation. Attracting private sector participation, in turn, will likely require a restructuring strategy that relies on market forces and competition rather than government decision makers to direct strategy and operations into the future
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