Ukrzaliznytsia intends to introduce temporary management until the election of the chairman of the board

The National Security and Defense Council initiated the introduction of interim management due to the critical condition of the enterprise.

The National Security and Defense Council initiates the introduction of temporary management at Ukrzaliznytsia until the election of the chairman of the board and the formation of full-fledged governing bodies of the joint-stock company due to the critical condition of the enterprise, which poses a threat to national security.

“Information provided by the Security Service indicates a number of threats to state security related to the critical situation in the joint-stock company “Ukrainian Railways”, which could destabilize the critical infrastructure of the railway industry and create a real threat to vital interests of Ukraine,” said the document.

This information covers a number of blocks: the state of emergency of infrastructure and rolling stock, investment issues, labor, problems of tariff regulation and the critical financial condition of the company.

This was reported by the railway magazine Railway Supply

In particular, it is noted that the Board deliberately did not add and artificially attributed to the cost of transportation for the last 5 years UAH 43.5 billion of the wage fund.

It is also reported that the state tariff regulation, carried out during 2016-2020 in violation of the law, deprived UZ of almost UAH 100 billion of its revenues for transportation work and led to its critical condition. And further work of the joint-stock company “Ukrzaliznytsia” within the framework of economically unreasonable tariffs will lead to bankruptcy.

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The National Security and Defense Council pays attention to the debts of UZ. Today, the key problem of Ukrzaliznytsia, which threatens the company’s technical default and blocks its further development, is the availability of a loan portfolio amounting to about UAH 35.8 billion and UAH 19.1 billion in loans from Donetsk Railway moratorium.

It is also said that there are unpaid salaries, the indicators for capital investments are not met,  inefficient purchases are made. The low rate of electrification leads to the fact that UZ buys diesel fuel from the aggressor country instead of switching to Ukrainian electricity.

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“Such actions of Ukrzaliznytsia’s management bodies (Supervisory Board, Chairman and Board members) have led to a critical situation in the company, which could destabilize its work and create a real risk to the country’s economy and security”, the document reads.

Therefore, in order to eliminate threats to national security, prevent further decline in economic indicators and prevent the implementation of corruption risks on UZ in the National Security and Defense Council consider it appropriate to initiate on immediate action to stabilize the company.

They also initiate the introduction of the temporary management of Ukrzaliznytsia for the period of election of the chairman of the board and the formation of full-fledged governing bodies of the company in compliance with all requirements of current legislation of Ukraine and OECD standards.

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