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25 steel and coal companies urge government to nix rail rate hike
Journal Staff Report

KIEV, March 15 – Twenty five big Ukrainian companies, mostly steelmakers and coal miners, urged the government Tuesday against a major tariff increase on railroad cargo shipments, suggesting the hike may stall economic growth.

The Transportation Ministry dismissed the concerns and charged that previously well-connected businessmen seek to continue significant discounts, often at 70%, on moving the commodities.

The clash underscores frequent conflicts that now emerge between the new government and huge, privatized companies that used to rely on special deals with the previous government.

“The railroad authority guarantees that tariffs will be transparent, while personal discounts to oligarchs will be removed,” the ministry said in a statement.

The ministry plans to double the cargo shipment tariffs, which is crucial for UkrZaliznytsia, the state railroad monopoly, to prevent losses and improve maintenance of its railroad car fleet. The ministry said after the increase the tariffs will match those in neighboring Russia and Belarus.

But the Ukrainian companies, such as steel makers Azovstal, Zaporizhstal, Illicha Metallurgy Mill, coal miner Zasiadko and heavy machinery firm Frunze, said the hike will increase their costs and reduce competitiveness.

“So far the new authorities demonstrate total disrespect towards interests of national business,” the companies said in a letter to President Viktor Yushchenko, the Cabinet of Minister and the National Security and Defense Council.

Ukraine’s steel sector, the backbone of the country’s economy, was responsible for 40.2% of Ukrainian exports of goods and commodities in January, according to the State Statistics Committee.

Ukraine’s exports of goods and commodities rose 16% on the year to $2.5 billion in January, while imports increased 4% to $1.8 billion, the committee said. (nr/ez)




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