Losses of the state enterprise Donetsk regional railroads (DZhD), a part of the state enterprise Ukrzaliznytsia, will soon grow to 6-65 million UAH per month because the railway authorities cannot provide for the full-scale cargo connection with the city of Mariupol.
“I’ve read somewhere that in July DZhD did not receive 42 million UAH of income because of the non-fulfillment of shipping plans on behalf of Mariupol Ilyich Iron and Steel Works and Azovstal. It’s a good thing that after 3 years Ukrzaliznytsia has finally started thinking about lost profit. But we have no problem with metal shipping, as the volume of outgoing cargo from metal works is 3 times as large as the incoming raw materials. We ship everything we produce”, Mariupol Ilyich CEO Yuri Zinchenko said.
But there are problems with raw materials delivery. And they are probably the cause of the Ukrzaliznytsia losses.
“They are considerable – some 40 million UAH per month. But they can grow to 60-65 million UAH”, he added.
The thing is the only railroad branch connecting Mariupol with the rest of Ukraine – the Kamysh-Zarya – Volnovakha route – despite the twice-announced throughput of 24-25 cargo trains per year can only handle 16-17 trains even after 2 reconstructions.
“While in July to keep up with the manufacturing program we needed 20-21 cargo trains a day. Because of Ukrzaliznytsia’s inability to provide for the full-scale connection hundred thousand tons of cargo are delivered to the Mariupol works via alternative channels”, Zinchenko noted.
According to him, the DZhD throughput was the obstacle for Mariupol works to increase pig iron manufacture.
“From August till the end of the year Azovstal and we plan to increase pig iron output by 7% compared to Q2, but how to do it with the low throughput of the Kamysh-Zorya – Volnovakha route – we have no idea. The drop of pig iron manufacture at 45 thousand tons per month is the loss for railroad at 180 thousand tons of cargo or 25 million UAH per month”, he said.
Zinchenko believes, half of the loss mentioned by Ukrzaliznytsia (42 million UAH) could be removed in a day.
“For example, last night an empty train passed through the route, that’s minus 3.3 thousand tons of raw materials at our end, and minus 500 thousand UAH for Ukrzaliznytsia”, he explained. (Ukrainian metal)