Igor Mazepa: Deutsche Bahn consultants can help turn Ukrzaliznytsia into an effective, profit-oriented company

Igor Mazepa, the CEO of Concorde Capital investment company, on the hiring of consultants of the German Deutsche Bahn to reform Ukrzaliznytsia

Ukrzaliznytsia has two global problems, in my view, – says Igor Mazepa.

• The first is the excess of personnel, as well as the high level of atrophy of its railcars and locomotives.
• The second is exposure to negative external influences: overregulation of certain segments, particularly low rates in its passenger segment, as well as its high tax burden, especially the high tax on land and the excise duty on fuel, the payment of which is used for road repairs.

An external independent consultant or manager can help UZ resolve these problems much more effectively, including at the state level, – says Igor Mazepa. That is, the main assistance from German specialists for UZ may lie in convincing management to transform UZ into a profit-oriented company.

If our railway executives and state officials will listen to the recommendations of German specialists, the positive effect for UZ can amount to about UAH 10 bln annually.

But it’s not worth expecting that UZ will be transformed into Deutsche Bahn with the help of specialists. By the way, UZ will have more cargo volume transported by rail than Deutsche Bahn, – comments Igor Mazepa.

The strength of Deutsche Bahn is in its solvency. If Deutsche Bahn transported cargo and passengers at Ukrainian rates, then the company’s operational loss from cargo and passenger rail transport would have been

about EUR 4 bln in 2019.

These were Igor Mazepa’s comments for the Liga Biznes (biznes.liga.net) news site on how Deutsche Bahn can reform Ukrzaliznytsia.