Rise in price of railway tickets: economist Viktor Medvid answered how justified the price increase is

For all those who use Ukrzaliznytsia services, tickets will be 22% more expensive this year and 15-26% more expensive in 2022.

design element Klymenko Time 14 minutes to read : 4
Rise in price of railway tickets: economists answered how justified the price increase is
The Ministry of Infrastructure has prepared a draft order approving changes to passenger transportation tariffs. Starting from April 2021, Ukrzaliznytsia will regularly index tariffs by 2% per month. Thus, by the end of the year, the ticket price will increase by 22%. This is expected to bring the company over UAH 557 million in revenue. According to the Minister of Infrastructure, Mr. Krykliy, the price increase should not be called an increase, but a slight indexation. I would like to ask right away, is there any growth in the economy and incomes of Ukrainians to cover all this?

So how justified is the rise in ticket prices?

According to expert Viacheslav Konovalov, the situation with indexation is not easy. He assures us that we already saw something similar last year in 2020, but it was never introduced, and it was decided to postpone it until later. "Later" has come and the final date was set for March 2021, but as we can see, the increase was again postponed to late March - early April.

Konovalov assures me that some kind of underhanded games are still being played." Indeed, so far only a draft order has been published and nothing more. And at a regular press conference, Ukrzaliznytsia said that they are still planning, arguing, thinking, and coordinating the raise plan with other agencies. But what is taking them so long to decide?

"Another strange thing I noticed about this indexation is that the last time they raised tariffs, Ukrzaliznytsia honestly admitted that it would receive 270 million from the indexation (as far as I remember). This time, the order of figures in Ukrzaliznytsia's financial plan remained the same, about 90 billion in turnover. But at the same time, the railroad wants to receive UAH 500 million from indexation, not 270 million. This is some kind of magic number."

Any forecasts of a 22% ticket price increase by the end of the year are significantly different from any other political scientists' forecasts of an increase in citizens' wages, assures political scientist Viktor Medvid.

"I believe that this initiative of the Cabinet of Ministers, the Railways, and the Ministry of Infrastructure is inadequate," the expert said, adding that the chosen system of 2% per month is a political manipulation, saying that if they had said 10-15% at once, people would have been outraged, and 2% is not so hard on the ears.

As for the amount of Ukrzaliznytsia's losses in 2020, which increased by 26% from passenger transportation compared to 2019, Vedmed said this is a rather "oral" statement, as the calculations have never been made public.

The expert also does not rule out that the railroad will soon minimize the number of cheap tickets and increase the number of expensive ones: "This way, a person will not be able to buy the same Kyiv-Dnipro ticket for 170 hryvnias, but will be forced to buy intercity tickets for 700-800."