The existing system of car distribution in Ukraine, which operates under the Transport Logistics Center of Ukrzaliznytsia PJSC, has a negative impact on Ukraine's economy and bears significant corruption risks. As reported by 112 Ukraine, this was stated in a letter of Metallurhprom Association President Oleksandr Kalenkov to Prime Minister of Ukraine Volodymyr Hroisman. According to Kalenkov, this situation damages both businesses and Ukrzaliznytsia state railroad operator.
"According to various estimates, in Q4 2016, Ukraine's mining enterprises made up to 10 percent less export supplies of the planned volumes of iron ore due to the lack of dumper cars, which is equivalent to a loss of $50 million in export revenues. Ukrzaliznytsia received about 140 million hryvnia (almost half of Ukrzaliznytsia's income in 2016)," the expert pointed out.
Kalenkov indicated two major problems in providing cars. The first one is that the car distribution services are provided through intermediary firms, which are not cargo shippers. Their margin could potentially be a source of corruption. The second problem is the approach to the distribution of goods.
Metallurhprom Association president asked the government and Ukrzaliznytsia management to amend the car distribution procedures.