Ukraine's government approves Ukrzaliznytsia's 2020 financial plan

Ukraine's Cabinet of Ministers has approved Public Joint-Stock Company Ukrzaliznytsia's consolidated financial plan for 2020.

Caps on salaries

Under the document, monthly fees and payments to the chairman and members of the board and the supervisory board should not exceed UAH 47,230 (about US$1,700) per person for the period of quarantine established by the Cabinet of Ministers of Ukraine to prevent the spread of COVID-19 in Ukrainian territory and until the end of the month when the quarantine is canceled.

"After the abolition of the quarantine, the payment of remuneration to the chairman and members of the supervisory board cannot exceed the maximum permissible amount determined by the procedure for determining the terms of payment for services and compensation for the costs of members of the supervisory boards of government-controlled enterprises and business entities, in charter capital of which there are more than 50% of shares belong to the state, approved by Cabinet resolution No. 668 dated July 4, 2017," it said.

Payment of dividends

The Cabinet of Ministers approved a draft law developed by the Ministry of Infrastructure on deferring the payment of dividends by Ukrzaliznytsia.

Transportation operator

Ukrzaliznytsia is a public joint stock company, wholly owned by the state. The company is included in the list of state-owned enterprises not subject to privatization.

Ukrzaliznytsia, the Ukrainian Railways, accounts for 82% of freight transportation and about 50% of passenger traffic carried out by all types of transport.

In terms of freight traffic, the Ukrainian Railways rank fourth on the Eurasian continent, being behind the railways of China, Russia, and India.

Background

• Ukrzaliznytsia in April-May 2020 began to see a significant decline in revenue from freight traffic. The revenue in May fell by 97% year-over-year. At the same time, loading in May was higher than a month earlier.
• On April 15, 2020, the Cabinet of Ministers dismissed Željko Marček from the post of acting Chairman of Ukrzaliznytsia's board. Ivan Yuryk was appointed acting chairman of the company's board.
• In June 2020, the Supervisory Board of Ukrzaliznytsia suspended acting board member Roman Veprytsky, who was in charge of cargo transportation.
• On July 3, 2020, the Cabinet of Ministers of Ukraine made changes to the composition of Ukrzaliznytsia's board, appointing Ivan Syniakov as acting member of the board.
• On July 28, 2020, the media reported that six people are applying for the post of head of Ukrzaliznytsia – four Ukrainians and two foreigners. According to preliminary forecasts, the government may appoint a new head of the company in two to three weeks. The list of candidates is as follows: Jakub Karnowski, Peter Chernyshov, Ivan Yuryk, Volodymyr Vladymyrov, Volodymyr Zhmak, and Oleksandr Pertsovsky.