"Catastrophic situation": why in Ukraine they fear a complete stop of the carriage industry

In 2021, the car-building industry may completely stop in Ukraine.

This was stated by representatives of the carriage building and logistics companies at a press conference held in Kiev.

The reason for this was an oversupply of decommissioned freight cars supplied from Russia and cars for which the service life is being extended.

Due to such a surplus, Ukrainian carriage plants have no orders for new products.

“Today there is a catastrophic situation with the domestic production of freight cars (their localization in Ukraine exceeds 95-97%), first of all, due to the colossal surplus of decommissioned cars and cars imported from Russia, for which the service life is being extended.

Therefore, 2021 may become the year of a complete stop of the Ukrainian freight car building industry, ”said Andriy Zhariy, General Director of Aurum Group, which includes the Diesel Car Building Plant.

At the press conference, data were announced, according to which about 190 thousand freight cars are registered in Ukraine, of which 43.5% have exhausted their resource.

At the same time, in 2016-2019, 18 thousand decommissioned units from Russia were imported into the country.

An RT source in the Ministry of Strategic Industries of Ukraine said that one of the main customers for carriage enterprises is Ukrainian Railways, but due to a lack of financial resources, they have to replenish their trains with decommissioned cars from the Russian Federation. 

“The company (Ukrainian Railways. -

) does not have the funds to renew its rolling stock, so the factories are sitting with nothing.

It is practically unrealistic to arrange exports, since Europe does not need Ukrainian cars, and the Russian market is closed for us, ”the official explained.

Request for help

Today, there are five operating car-building enterprises in Ukraine: Kryukov Carriage Works (KVSZ), Dneprovagonmash, Diesel Plant, Karpaty Plant and Popasnyanskiy VRZ.

A year ago there were 12 of them, and in 2011 - 18. Such data were provided during a press conference by a representative of the Kryukov Carriage Works, Yuri Brusnik.

According to him, now about 12 thousand people work in the Ukrainian car building industry, while in 2011 the industry employed 32 thousand specialists.

In turn, the technical director of JSC "Dneprovagonmash" Alexander Zhukov said that in 2020 his company lost 32% of jobs, and the salary fund was cut by 54%.

• Railways of Ukraine

• Reuters

• © Valentyn Ogirenko

According to the State Statistics Service, in the period from January to August 2020, the volume of production of freight cars and platforms in Ukraine fell by 73.7% compared to the same period in 2019.

During this time, 2,089 flatcars and wagons were produced, of which only 243 units were produced in August, which is 70.3% less than in August 2019.

It is noted that the bulk of freight cars were produced at KVSZ, although production there also dropped significantly: in eight months of 2020, the plant produced 1,024 units of cars, which is 70% less than in the same period last year.

In addition, according to industry representatives, as of August 2020, Ukrainian enterprises sold only 1,579 freight cars, while in 2019 this figure was more than 10 thousand units.

In connection with the current situation, the participants in the press conference put forward a number of proposals to the government of Ukraine.

These include a complete ban on the import into the country of wagons with an extended service life, a ban on the procedure for extending the terms of use, and a restriction on the use of foreign wagons in domestic transport.

“We ask the government to make a decision on these issues within two weeks.

The President and Prime Minister of Ukraine have repeatedly promised to resolve them, they are aware of the situation.

And we do not exclude that the workers of the enterprises, left without work and wages, will want to go under the walls of the Verkhovna Rada or the Cabinet of Ministers with their demands, "- said representatives of the carriage industry.

Otherwise, according to them, the Ukrainian economy will lose 150 billion hryvnia in the form of investments in the railway industry, lose more than 45 billion in taxes and 120 thousand jobs for specialists in the country's heavy industry.

An RT source at the Ministry of Economy says that the government is developing a program for the renovation of the railway industry, under which the state will be ready to compensate interest rates on loans when purchasing railcars, and their service life and import from abroad will be limited.

However, the concern is caused by the possible lack of funds for the implementation of this program.

“The document is good, but I think that there will be no money for its implementation.

The government already has to look for funds to pay salaries and pensions, and creditors are in no hurry to give them and demand new reforms.

Therefore, manufacturers are afraid that they will have to completely stop work next year, and wrecks, not wagons, will drive on the rails, ”the official said.

Using Ukrainian railways is scary, says an RT source in the Batkivshchyna party.

“You can shoot horror films on Ukrainian passenger trains - everything is old and breathes in fancy.

The same is with freight cars.

Therefore, producers are forced to transport agricultural products and other goods by road and kill the few roads that have been repaired.

This is how Ukraine is paying the price for trying to befriend Europe.

No one in the EU is interested in the prosperity of Ukrainian industry.

It is strange that for so many years they have not thought about it in high offices, ”the deputy says.

Industrial fall

It should be noted that not only the carriage industry was in a critical situation.

In Ukraine, there is a general decline in industrial production.

According to the State Statistics Service, in August, the decline in industry only accelerated: if in July 2020 it was 4.2%, then in August production fell by 5.3% compared to last year.

Between January and August 2020, the industrial production index fell 7.4% compared to the same period in 2019.

• Volodymyr Zelenskyy during a working trip to the Dnipropetrovsk region

• © president.gov.ua

Against this background, President Volodymyr Zelenskyy said that the priority of the Ukrainian authorities is the revival of industry and the need to return the country to state "industrial glory".

He stated this on August 27 during a working trip to the Dnipropetrovsk region.

“Today our priority is the revival of the Ukrainian industry.

I myself was born in Krivoy Rog.

We understand what industry is.

We understand that where there is industry in a particular city, this industry feeds the city and gives jobs, ”the press service of Zelensky said.

However, political scientist and economist Alexander Dudchak believes that the current administration does not have the political will necessary to correct the current situation.

“Ukraine could stop the decline in production if the authorities had pragmatic tasks.

In fact, today Zelensky simply justifies his actions as president, which are not carried out in the interests of the Ukrainian people, "the expert noted.

Commenting on the data presented at the round table of Ukrainian car builders, he stressed that another branch of Ukrainian industry is on the verge of a complete stop due to the consequences of a coup, the purpose of which was to transform the country from a sovereign state into a sales market for foreign manufacturers.

In turn, the head of the Center for Systems Analysis and Forecasting Rostislav Ishchenko recalled that the car-building companies of Ukraine are experiencing serious difficulties due to the severance of economic ties with Russia and, as a result, the loss of the Russian sales market.

“The country does not produce new wagons, the old ones are gradually wearing out, in this regard, at a certain stage, there is a deficit.

The incumbent Ukrainian politicians, who are difficult to blame for sympathy for Russia, have repeatedly stated that without a return to the Russian market, the Ukrainian economy is doomed.

However, the government does not change both its external and internal course, therefore it is impossible to stop the decline in production, ”the expert concluded.