Chief Executive Officer of “Zaporizhstal” PJSC Rostyslav Shurma took part in public consultations concerning the issue of railway rates increase. The State Regulatory Service organized it. The Supervisor of the Works announced the metallurgists’ attitude and stressed upon that every decision made by the state monopoly, should be reasonable and it should take into account the economic realities existing in Ukraine.

The interview of the General Director of “Zaporizhstal” Works Rostyslav Shurma after public consultations.

– Rostyslav Igorevych, what can be the consequences if still railway men raise rates?

– Every decision must be justified. I think the whole industry in Ukraine is “happy” due to the desire of “Ukrzaliznytsia” to increase railway tariffs. Every citizen of Ukraine thinks quite similarly. He doesn’t feel comfortable when another state monopoly, it does not matter – the heating system, water supply services – unreasonably raises tariffs.

The economy is in real crisis. What can do the industry in this situation? It is necessary to work so that to improve its efficiency. And exactly the same we expect from “Ukrzaliznytsia” and from all other state monopolies – they do not have to shift their problems and slackness on the shoulders of customers! Do not have to shift the slackness of water supply services, heating systems on the shoulders of the citizens of Ukraine but they have to be engaged in business – to fight corruption, to improve efficiency, to reduce costs. After all, to perform exactly what we do every day at “Zaporizhstal” in order to survive in these difficult circumstances. If we move beside each other, but not simply throw each other over the bridge, then I think we would be able to save the economy of Ukraine.

– If you talk specifically about the impact of options proposed by “Ukrzalіznytsia” concerning tariff rates escalation, will it be a rise in prices of enterprises – including those steel-making ones?

– No. We, unfortunately, export 80 percent of our production. This means that we cannot set prices there, in the world markets, but we have to accept that price which is offered by the market.

Today, the reality is that we are working with zero profitability, plus or minus 1. That is why, we think concerning each incoming order – whether to accept it or not. If they raise tariff rates by 15 per cent, it would affect the production cost of our capital at least 5 to 6 dollars. What does it mean? That 20 to 30 percent of our orders immediately become unprofitable. We shall not be able to fulfil them, because having accepted such an order for execution, we simply cannot do anything – even there would be nothing for paying taxes, and that railway tariff and wages. As a result, we will have to curtail production.

– How does it threaten the city and the citizens of Zaporozhye?

– If we curtail production, social problems would inevitably arise, because this would cause unemployment. This would cause reduction in tax payments. And for “Ukrzaliznytsia” – it won’t increase their income by 15 percent, as they think – that would be a reduction in income! As the rate of tariffs will increase by 15 percent, and the volume of traffic will fall by 20-30 percent. So, increasing the rate by 15 percent, “Ukrzalіznytsia” would lose 15 percent of the income.