Ukrainian rail bill: notes in the margins

(from the issue №5, 149, December) Ukrainian parliament may adopt a law “On Railway Transport” in the first quarter of 2017. Such opinion, according to several media reports, stated First Deputy Minister of Infrastructure of Ukraine Evgeny Kravtsov. Given the proximity of the railway reform, that has common ground with the shipping and port industry, “Shiping” magazine carefully read the rail bill and highlighted those areas that are directly or indirectly related to the maritime industry (determining the investment component, access to infrastructure, the duties of the owners of the of infrastructure complexes etc).

The bill was initiated by the Ukrainian Cabinet of Ministers in the framework of the State program of reforming the railway transport for 2010-2019. In the explanatory note to him the Minister Infrastructure Vladimir Omelyan reports that the purpose of the adoption of this bill is to improve the market mechanisms in the rail and the need to build a new structure of relations of participants of the transportation process. In this regard, the bill sets out the basic requirements, obligations and rights of an infrastructure operator, carrier, infrastructure management standards, requirements for railway rolling stock and bases of activity of the operators of rolling stock.


Rail democracy

One of the main ideas of the bill, according to its initiators, is to establish the principle of equal access to infrastructure services, which applies to all who are interested in obtaining such services. The project also determines the characteristics of the design, construction, reconstruction, maintenance and disposition of railway transport infrastructure. The document provides for the establishment of the system of state administration in the field of railway safety in accordance with the European Union law, which provides for implementation of the Ukraine-EU Association Agreement, which ultimately will improve traffic safety in the conditions of development of competition on the railway market.
Construction and maintenance of infrastructure

Design, construction, acquisition and maintenance of infrastructure and the acquisition of objects of business infrastructure operator shall be covered by sources such as the investment component of state support, the infrastructure operator’s own funds, private investors funds, as well as any sources not prohibited by the law. The objects constructed (purchased) with the involvement of the budget funds, the investment component of tariffs for infrastructure services of the operator, or his own funds, secured by the state and transferred to the operator by the law. If the construction or purchase of an object was achieved by funds which are not listed above, such objects are assigned to the State and transmitted to the operator in a lawful manner, with the consent of the investor – or on the basis of compensation contracts for their construction costs (concluded on terms determined by the Cabinet of Ministers). The reconstruction, restoration and repair of objects allocated to the infrastructure operator, produced due to depreciation, the investment component, the investor’s own funds or through dedicated budget.

Procedure for disposal and use of the objects of the infrastructure complex owner, design, construction or acquisition of which is produced by means of various sources of funding, is determined by the relevant investment agreement. In such a case, the parties identify a business entity, which will carry out a further operation of the facility. If the construction (reconstruction, repairs, etc.) of the objects of common use calls for the further development of infrastructure facilities of the infrastructure complex owner, or the owner of the access track or infrastructure operator, – the costs associated with it (taking into account the payback period of investments) must be owner compensated on the basis of the relevant contracts.

The objects of uncommon use, actively involved in the movement of trains and shunting operations on the access tracks and built or reconstructed with funds that do not belong to the owner of the infrastructure complex of uncommon use, can be transferred to such owners on the basis of trust management, lease (or other reasons). It is also possible free transfer of ownership for the further operation.
Note that some objects, according to the draft law, not subject to privatization, the sale during the production of the bankruptcy proceedings, they can not be seized by the court and the executive documents or seized. Also the infrastructure operator can not alienate these objects.
These are railway station and tracks of public use, traction substations, catenary and other technological equipment supply, alarm system, centralization, blocking and train control, installations and equipment designed to perform rescue and recovery operations. This is the state property, provided only transfer them to the operator for infrastructure maintenance and operation.


For the owner to note!

Owners of the access track, infrastructure complexes of uncommon use offer content and operation of the tracks, their lighting, cleaning of garbage and snow.

Junction access tracks being constructed to existing tracks of common use is based on the agreement of technological connection between the infrastructure operator and the owner of the new or constructed access tracks. The contract shall be made in writing and shall be public. There must be listed, in particular, the actions taken and the procedure for their funding.

The owners of the access tracks, of the infrastructure complex of uncommon use, in particular, are required to have an authorization certificate, security certificate, as well as personal who meet the qualification requirements. Transportation process, shunting operation within the infrastructure complex of uncommon use, the access track, is managed by their owners. Organization of management is on the basis of the developed process, agreed with the central executive unit that implements the state policy in the sphere of railway transport. The enterprises of railway transport, as well as owners of access tracks and infrastructure complexes of uncommon use are responsible for safe operation of the above objects, as well as the prevention of acts of unlawful interference.


Investment component

The mechanism and procedure for payment of the investment component and including it in the tariff for the implementation of investment programs and/or compensation for investment resources, attracted to finance investment projects, is approved by the National Commission, providing regulation in the transport sphere, in coordination with the central executive unit that implements the state policy in the rail industry. Payments for works (services) in rail transport, which is out of state tariff regulation, conducted at free tariffs determined by agreement of the parties legally.

Prices (tariffs) for goods produced (realized) by the subjects of natural monopolies, are subject of state regulation.


Access to infrastructure

Access to infrastructure is provided on the basis of equal conditions for the provision of services on a contract basis. The order of access to infrastructure is developed by the operator and approved by the central executive unit that implements the state policy in the field of rail transport, and the National Commission, which regulates the activities in the field of railway transport.The infrastructure operator has the right to charge for access to the infrastructure, including additional services (determining by the order of equal access, approved by the mentioned government agencies), as well as set the size of fees for such services. The essential terms of the contract on granting of services of access to infrastructure for transport, in particular, are: a list and cost of services; settlement procedure and payment methods; procedure for the exchange of information on the harmonization of the traffic, as well as supporting documents; coordination of technology and organization of transportation process; the establishment of the maintenance of order, the repair of rolling stock during the implementation of the traffic. The cost of access to infrastructure services is determined on the basis of cost due to the tariff established in accordance with this Law, and in part not regulated by this tariff – on the basis of a relevant agreement by agreement of the parties.

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