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How Ukraine becomes a dump of gondola cars

Our country becomes a dump of railroad freight gondola cars withdrawn from use in Russia.

According to statistics, a reduction of withdrawn from use cars is observed in the Russian Federation in the current year and the most requested by business – gondola cars – were discarded. The reason is that all of them are imported to Ukraine. The economic benefit is that national carriers offer 30-50% more for withdrawn from use gondola cars than Russian conservation companies.

I must admit that we were about to reach this moment during the last 20 years. As defined by engineers, the estimated service life of freight gondola cars is 22 years – a number of which are currently in Ukrainian Railways’ rolling stock and more than 90% are owned by private owners – and it has been overdue. These cars, of course, undergo a scheduled repair, using the capacity of Ukrainian Railways, and come back to roads with the prolonged service life up to 30 years and more. However, the endless trouble is chronical insufficient funding, viz. repair works, which led to the critical technical condition of Ukrainian Railways’ rolling stock. Moreover, it poses a technological hazard.

Heavy railroad cars wear, their poor technical condition and the most important is a severe shortage of freight rolling stock among freight operators – all these factors should have stimulated both Ukrzaliznytsia (UZ/Ukrainian Railways) and the Ministry of infrastructure of Ukraine to undertake an immediate reform and modernization of the railway. However, Ukrzaliznytsia (UZ/Ukrainian Railways), being captivated by “sovok” (Soviet Union), solves the problem of a national rolling stock shortage, as it has done before, by prolonging the service life of inventory rolling stock cars and of withdrawn from use in Russia cars, imported by private owners, to 5-7 years.

As a result of this procedure, UZ employees determine the list of necessary repairs for a certain railroad car, and, frequently, after carrying out these repairs, the load-carrying capability of the cars does not increase, and conversely, it decreases. And this happens because of the inefficiency of low-paid workforce, who stayed in UZ, severe price constraints on purchasing repair materials and, as a consequence, the cheapest but low-quality components are procured.

I am absolutely confident that this prolongation procedure of the service life of railroad cars is a dead end for the industry. Nowadays, it is difficult to assess the consequences of such railroad cars use: they can lurch while running, fall to pieces and cause a railway accident, as a result of which both people and infrastructure will suffer.

We urgently need to utilize a fleet of outdated cars by replacing it with new railroad cars. Besides, there is a sufficient number of railcar manufacturing and car-repair plants in Ukraine, which nowadays have to stay off road because of lack of orders.

I will remind that in the early 2000s Ukraine was a world leader in export of railroad cars. Annual export revenue in the peak years 2010-2011 was approximately $3 billion, while at present it falls short of $50m.

Ukrainian railcar manufacturing companies produced 52 700 cars in 2011, 6 324 in 2014 and only 1 054 in 2015. Such a steep fall in the production capacity is caused by the loss of a primary sales market for Ukraine – Russia. By 2012 more than 80% of new produce, exported by railcar manufacturing companies, has been transferred there. From the second half of 2012, the Russian Federation started to prevent access of Ukrainian railcar manufacturing companies to its market by stimulating the development of its own production.

 

It is worth noting that railcar manufacturing and car-repair plants of Ukraine have not been able to switch to other sales markets and restart work to the full extent so far, which is caused by a number of objective reasons. Considering their location: mainly all of them are locally created enterprises on the functioning of which thousands of families depend.

A long-term stimulation of national core enterprises on behalf of the state in the framework of railway modernization of the country would enable Ukraine to resume national engineering gradually, hence currency earnings. On the whole, this will give the industry a chance of extending beyond CIS countries and start a new European stage in development.

I as well as most other representatives-operators of Ukrainian machine engineering market hope that common sense will prevail in solving these problems, connected with the restoration of freight car fleet. Unfortunately, even the last comment of the head of the department of strategic management and development of Ukrainian Railways Olexandr Malahov about planned procurement of new railroad cars in 2018 does not promote this. Having said that according to the investment plan of the national monopolist, 8, 88 thousand of new cars are planned to be purchased, 5,18 thousand of which the company is planning to purchase from third parties. However, he has also noticed that this plan cannot be implemented in the case of lack of funding.

Also, this plan cannot be implemented if UZ target tendering processes for procurement of new cars are constantly blocked by the same company.

If this issue is going to be put on hold, Ukraine takes a risk of losing machine engineering, as skilled workforce leave the sphere and those who stay without a permanent workplace lose competence. Secondly, we are ourselves turning the country into a storage of withdrawn from use rubbish. Beneficial for whom?

NVBusiness