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Ukrainian Railways Initiates Auction for Renovated Grain Wagons: Aiming for Enhanced Connectivity

Ukrainian Railways Initiates Auction for Renovated Grain Wagons: Aiming for Enhanced Connectivity
foto: informator.ua/Ukrainian Railways Initiates Auction for Renovated Grain Wagons: Aiming for Enhanced Connectivity
10 / 10 / 2023

In an attempt to bolster grain exports and provide competitive transport services, Ukrainian Railways (Ukrzaliznytsia or UZ) orchestrated an auction on October 5th, targeting its renovated grain wagons adapted for the 1,435 mm gauge. The spotlight of this initiative was rail connectivity to neighboring Romania and Poland through strategic border points like Vadul-Siret, Dyakovo, Mostyska-2, and Yagodyn.

As much as it is about grain exports, it's also about Ukrainian Railways' commitment to retrofit parts of its fleet to function seamlessly on the 1,435 mm gauge with the prime focus on updating the bogies. Current metrics reveal Ukrainian Railways in possession of 1,810 operational bogies designed for the 1,435 mm gauge, potential of approximately 905 wagons to the European gauge which scarcely meets the railway company's needs due to pronounced equipment scarcities.

UZ Cargo Poland, the Polish arm of Ukrainian Railways, was closely involved in this auction. Fueled by an ambition to offer attractive pricing, it adopted a ‘Dutch auction’ model. It set the wagon usage price wheel at EUR 15, 60 (UAH 600) per day, dipping to a minimal EUR 5,30 (UAH 204) per day, reflecting the domestic transport rates.

International transit prices, though based on the domestic fee structure, would be recalibrated in partnership with this subsidiary to ensure competitiveness in the market. Winning bidders find themselves in a pivotal position, mandated to ink contracts with UZ Cargo Poland to activate their transport operations. 

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