V. Omelyan: I am opposed to the increase of railway tariffs to the purification of “Ukrzaliznytsia”

 

Exclusive interview of the Minister of infrastructure of Ukraine Volodymyr Omelyan

 

Question: the upcoming infrastructure days in Parliament. Tell us when they are scheduled and what bills will be submitted for consideration of BP?

Answer: We planned the infrastructure week of October, according to the latest information from the Verkhovna Rada is expected that it will be in November, I would love 3 November, not to tighten.

We have about 20 bills, of which, I believe, at least 10 are really key for the industry. This range of issues in highway construction and the decentralization of “Ukravtodor”, the creation of the road Fund, the introduction of tolling for vehicles with a foreign registration in the first place, large fines for overloading. It is also a set of issues for inland waterways. If we can take this list of laws, I think we will make significant breakthroughs and greatly facilitate the carriage of goods by inland waterways, which in turn will unload Ukrainian roads will facilitate the work of “Ukrzaliznytsia”, which is not in the best condition.

It will also be the questions that go towards the society’s issues e-ticket, taxi law. We also hope to finalise and submit the law about Parking.

I would like to specify the law on railway transport: if we vote, it will be a breakthrough for “uz”, for comfort, safety, quality for rail passengers and for freight companies, which will be a good choice on market conditions and speed of delivery.

 

Question: so, the most basic, in terms of the industry bill on railway transport. What are its main innovations? What has changed compared to previous versions of a document?

Answer: This is something that we open access to private operators to pull, that is, the owners of locomotives can work on the “Ukrzaliznytsia”. Railway infrastructure, in any case, remains the property of the state, “Ukrzaliznytsya” and the state get a fair rate for the use of infrastructure, is an opportunity for public-private partnerships.

It is also a possibility of introducing comfortable trains, as there are companies who are willing to work on the Ukrainian market in the context of passenger transport, we see that the demand is high and loading of trains is more than 80%. This is a significant step forward for the entire industry, we will attract working capital, and investments. “Ukrzaliznytsia” will not be easy, but will create a competitive environment and it needs to survive.

 

 

Question: Speaking of passenger traffic, do you mean the interest of private operators?

Answer: Yes, we analysed the situation in European countries, their experience is positive. Those operators that have appeared on separate flights, taking one or two directions and was more effective than the state, represent the best services for a lower price. In the case of Ukraine, I don’t think that the price will be less, but services will definitely be better by purchasing the new trains are modern, comfortable, where you don’t have to deal with toilets and Windows.

 

Question: From which countries can come to these companies?

Answer: I Think that there could be a synergy of the private Ukrainian and foreign capital, that would solve the market.

 

Question: How will be solved the issue with the monetization of benefits, and whether it is in the bill?

Answer: the monetization of benefits, we have some headache and I want a little more stabilized work on the railroad, so we held separate meetings with the regions, governors, spoke to this issue. If we want to have a quality message trains, the supply to big cities-the hubs, we need to work together on this. Can’t be a situation where the mayors of the towns or districts do not agree on a tariff increase, because it will interfere with their political image.

We say frankly, in this situation, the train will disappear in the coming years, as a class.

 

Question: In your opinion, would be passed this bill, because it carries a lot of changes to the market that not everyone will like it?

Answer: We want it was voted on, I would not like to spend 10 days infrastructure in Parliament. We must have a set of laws. According to our calculations, if we extend it completely, plus the law on concessions, we can safely say that after a certain period of time when the laws will come into force and will work, plus it’s $10 billion investment, is at least 100 thousand new jobs, etc. are things that affect the growth of the economy, the welfare of the population.

 

Question: Talk in General about the Railways, regardless of the new bill. What are the main problems in the industry today, you see?

Answer: “uz” – a paramilitary structure in which a very high internal spirit of the people, who are accustomed to command. Here it is necessary to show that the governance structure is hard, but it works efficiently. She has a vision, and those who gives the team understands the situation to the details. With this there is a certain problem today, in a typical case, when we experience the transfer of European companies on Ukrainian soil, with the hope that we have a perfectly working anti-corruption bodies that have a clear vertical state. But when he was not working quite right, the European experience does not give the desired effect.

It understands and the leadership of “Ukrzaliznytsia”, in the near future it will make some adjustments in its operating plan, and we will be able to get the result.

 

Question: does his tasks, the head of “Ukrzaliznytsia”? What you require from him in the near future?

Answer: it is very difficult. He tries. The tasks that we set before him, is a clear vision of the short-term, plus the strategic vision for years. Until the end we never got together but we’re working on it, reacting in the format of the fire brigade, to certain current challenges. Unfortunately, a period was missed, and “Ukrzaliznytsia” a structure where you need to be alert constantly.

I hope that the situation will stabilize, we are dealing with business, conduct meetings with associations of exporters, grain producers, metallurgists, meet regularly with the leadership of “Ukrzaliznytsia” in order to have a sense of reality.

Strategic things that I require, and which directly affect the economic situation in Ukraine, it is a five-year plan for the modernization of infrastructure, locomotives, rolling stock, passenger trains. It is not only the questions of the “Ukrzaliznytsya”, it is necessary and businesses, which also makes forecasts for its development. Cannot be such that “Ukrzaliznytsya” lived alone, all this has a direct impact on the economy of the country, it frankly says a business that has complications with transportation, are talking about it openly, we understand this “Ukrzaliznytsya”.

 

Question: Recently, Wojciech Balczun story about the facts of some “epidemic of pancreatitis” in “Ukrzaliznytsya” regarding the mass of hiding sick individuals-candidates for dismissal. Can the Ministry help in this situation?

 

Answer: the Ministry gives carte Blanche for any personnel appointment or dismissal. Thereof, nor the right of veto on our side, no it’s not him and by the Supervisory Board of “Ukrzaliznytsya”. All unfit people can be fired in one second and, in fact, if you want, it can be done. Technically, you can do so indefinitely, to conduct litigation, but there are many other bureaucratic tricks how to assign the right person or how to make change this system.

The issue here is the new content “uz”, and then I notice that it has to be the best managers in Ukraine who work with “Ukrzaliznytsya”. That’s what made Igor Smelyansky in “Ukrpochta”, he assembled a team of all stars and I think “Ukrposhta” in the next six months will give a strong result.

“Ukrzaliznytsya” have to go this route, we can’t be people, no-name, or people on the recommendation, it must be professionals who have been working in their respective fields: legal, auditing, rail, logistics, marketing. I wish it was the Ukrainians.

In addition, we have a need to pay attention to the middle link of the railroad, it is not as corrupt as the top, these are people who are motivated, willing to work and able to work, they do not need much time to adapt, responsibility and transparent management policy of “Ukrzaliznytsya”.

Meanwhile, who would not be appointed, it is not a 100% guarantee of success. We always expect superheroes, who will change the country, but such is not the case. There are errors in the personnel policy, is that the graduate of the best universities with experience in global companies is absolutely worthless for “Ukrzaliznytsya”.

 

Question: the issue of transportation, how do you assess the situation, and how it will address the shortage of rolling stock?

Answer: in Short – it’s a mess. This is a problem primarily managerial in nature. Second, not less important problem of obsolescence of the entire infrastructure and rolling stock. The third – an unfortunate turn of events. We later began to accumulate coal stockpiles, but it took part of the traction power, this coincided with the growth of construction and repair of roads, which has increased the demand for transport of low-margin goods, such as rubble. This also coincided with the peak of transportations of grain, even though it was predictable, and definitely a chronic issue, every leader “Ukrzaliznytsi”, taking the position, met with the sabotage of the lower level structures, and the oligarchs, “looking”, “the voyeur” that revolve around. They don’t want change, they want everything to be as it is, and any reform is regarded as a schema, an alternative to their earnings. It takes time. In any case, the issue of transportation will be addressed.

 

 

Question: after All, is the increase in tariffs on railway next year or not?

 

Answer: I am opposed to raising tariffs to purification of “Ukrzaliznytsya”. I want to see efficient and transparent structure, and then we will be able to speak with the public about what the cost is, price is, want to have a comfortable train with air conditioning, wi-fi? – It costs so much. Are you willing to pay more? – We will do it.

Otherwise, without a real understanding of the tariff structure, without an understanding of the cost of transportation, without restoring order, especially the corruption part, to increase the rates correctly in relation to the business. We have not created an additional product quality which have the right to demand more money.

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