Ukrzaliznytsia Signs Deal With German Company: Deutsche Bahn May Take Over Passenger Transport Management From 2022

The move is expected to help transform the passenger rail market.

Ukrzaliznytsia and German company Deutsche Bahn Engineering & Consulting have signed a consulting agreement on passenger transport — starting in 2022, the company may take over management of Ukrzaliznytsia's passenger services. 

Here is information on the benefits Ukraine's railway may gain and how it could fix the passenger transport situation on the railway as a whole.

According to the agreement, the focus is on improving the planning and development of passenger rail services, optimizing procurement, and renewing rolling stock.

The German company will help Ukrzaliznytsia separate passenger and freight transport and ensure, as expected, effective management. The consulting is the first stage of cooperation, which should be implemented by the end of 2021. 

If it is successfully implemented, at the second stage Ukrzaliznytsia will bring in a team of managers from Deutsche Bahn to directly manage passenger transport as early as 2022.

According to acting Chairman of the Management Board of Ukrzaliznytsia Oleksandr Kamyshin, DB E&C must develop a roadmap for implementing long-distance and suburban passenger transport over the next five years and a passenger transport financing model. 

Oleksandr Kamyshin 
Acting Chairman of the Management Board of Ukrzaliznytsia JSC

The industry's reform must end the long-standing practice in which passenger transport is financed through freight. These are separate business areas of our company and must be accounted for and financed separately. Therefore, we expect our consultant to develop an effective financial model for passenger transport. 

DB Board of Directors member for infrastructure Ronald Pofalla said that the path Ukrzaliznytsia is now on was taken by Germany not long ago, about 10 years ago. "We are glad to share our own experience and strengthen our cooperation," Pofalla said. 

Ukraine's Infrastructure Minister Oleksandr Kubrakov noted that the transfer of passenger transport management to Ukrzaliznytsia by DB Consulting is the first systemic step toward the full transformation of rail transport in Ukraine.

Oleksandr Kubrakov
Ukraine's Minister of Infrastructure

This year the state is funding Ukrzaliznytsia's passenger transport for the first time. With adequate funding and drawing on the experience of German Railways, we are starting a "Great Construction" at Ukrzaliznytsia that will cover all infrastructure, rolling stock fleet and service. We aim for German quality in Ukraine's rail transport market.

DB E&C experts must determine transport volumes and Ukrzaliznytsia's approximate need for capital investment in rolling stock renewal for use in the socially essential transport model. 

The service provider will also assess the prospects of procuring and producing passenger rolling stock — regional electric trains, diesel trains, night train carriages — and the possibility of producing such rolling stock within international cooperation with a Ukrainian manufacturer.