Valeriy Tkachev explains UZ’s position on the use of 1435 mm gauge bogies owned by UZ

Valeriy Tkachev explains UZ’s position on the use of 1435 mm gauge bogies owned by UZ, as reported by the railway portal Railway Supply.

Valeriy Tkachev is the Deputy Director of the Commercial Department at JSC “Ukrzaliznytsia” (UZ).

To understand the essence of the matter, it’s important to distinguish between two things:

1. The service of swapping bogies from 1520 mm to 1435 mm gauge on freight wagons, provided by JSC “Ukrzaliznytsia” as a monopoly at state-regulated tariffs at bogie swap points.

Indeed, this is a monopolistic service (use of infrastructure – bogie swap points), and the company is obliged to provide it to all interested parties. However, it should be understood that UZ will provide such a service if there is technical feasibility, as the production capacities of bogie swap points and the capacity of bogie storage areas are physically limited.

2. The actual use of 1435 mm gauge bogies for transporting goods. A bogie is a technical element of a freight wagon. Both the wagons and the bogies can be privately owned or belong to the state carrier (JSC “Ukrzaliznytsia”). After the market deregulation, more than 70% of cargo transportation uses private wagons.

The position of JSC “Ukrzaliznytsia” is quite straightforward. UZ plans to use its own 1435 mm gauge bogies for swapping its own wagons.

UZ’s subsidiaries operate over 50,000 freight wagons.

The existing number of bogies is approximately 1,810 units (approximately 900 wagons converted to 1435 mm gauge bogies).

Converted wagons with 1435 mm gauge bogies are offered to Ukrainian exporters at an attractive/competitive price.

The goal of this initiative is to reduce logistics costs for exporters and increase the percentage of UZ wagon utilization.

Private owners of grain carriers can purchase or convert their bogies to 1435 mm gauge and offer them to Ukrzaliznytsia for bogie swap services.

Several wagon repair enterprises have technical solutions for modernizing bogies (converting 1520 mm gauge bogies to 1435 mm gauge bogies). These companies can perform work to convert private bogies for private wagons.

Where possible, JSC “Ukrzaliznytsia” will reintroduce its own bogies for use by private wagon owners.

Currently, all available UZ bogies are utilized in the transportation of goods in the company’s wagons.

It should be noted that the implementation of this measure will not lead to an increase in logistics costs or a reduction in transport volumes. On the contrary, shippers will receive more favorable conditions for using wagons.

JSC “Ukrzaliznytsia” has established UZ Cargo Poland to efficiently operate the company’s wagons abroad.

When contacting UZ Cargo Poland or the Liski branch, wagons of JSC “Ukrzaliznytsia” with converted 1435 mm gauge bogies will be offered to customers at competitive rates (under a TEP contract).

JSC “Ukrzaliznytsia” plans to compete with its wagons against both Ukrainian private wagons and foreign wagons with 1435 mm gauge.

Starting from October 5, 2023, JSC “Ukrzaliznytsia” will offer its own grain wagons with converted 1435 mm gauge bogies at Prozorro.Sales auctions. The auctions will be conducted in a Dutch auction format (lowering the price).

At these auctions, agrarians will be able to purchase UZ wagons at a minimum rate of 204 UAH/day (the minimum possible rate); currently, the base rate for wagon use is 600 UAH/day. This represents almost a threefold reduction in the cost of using UZ wagons.

Additionally, all grain cargo exporters will be able to use UZ wagons with converted 1435 mm gauge bogies (UZ wagons are available to all participants in the grain market), not just a few large players with their own wagon fleets.

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