Ukrainian Railways, known as Ukrzaliznytsia, is projected to experience its first losses in freight transport this year, raising concerns about the effectiveness of its current cross-subsidization system.
Oleg Yakovenko, the company’s director of strategy and transformation, indicated that the financial health of Ukrzaliznytsia is under significant structural pressure. He noted that while state orders currently support long-distance and regional connections, suburban transport—which incurs losses of approximately 11 billion UAH—remains outside this financial framework.
“The state aid we are receiving is just the beginning. However, we need to close the gap, and no single tool can address this issue alone,” Yakovenko stated.
He further emphasized that solely relying on tariff increases to cover financial shortfalls would result in a shock to the economy. Consequently, the company is seeking long-term funding solutions to ensure infrastructure stability and enhance collaboration with European partners.
Ukrzaliznytsia is also facing a decline in its freight base. According to Valeriy Tkachev, the deputy director of commercial operations, the railway transported 161.3 million tons of cargo in 2025, which is 13.6 million tons less than the previous year. The most significant drops were seen in coal and ore transport, attributed to the occupation of industrial sites and energy supply issues.
Yakovenko warned that without a coordinated funding solution for the sector, Ukrzaliznytsia may have to resort to radical optimization measures, including structural reforms, cost management, and divestment from non-core assets.
Earlier, the Federation of Employers of Ukraine urged Prime Minister Yuliya Svyrydenko to reconsider proposed tariff increases for freight transport in 2026. Business estimates suggest that a 37% hike in tariffs, as planned by the government, could lead to a 96 billion UAH reduction in GDP.
It is worth noting that Ukrzaliznytsia had previously sought a 40% increase in freight tariffs to offset losses from passenger services, but this proposal was met with opposition from the Ministry of Economy.
Ukrzaliznytsia is on track for potential freight transport losses in 2023, prompting concerns about its financial model and calls for tariff reconsideration. The company faces significant challenges, including declining cargo volumes and the need for effective funding solutions.