Interlegal lawyers applied to the State Regulatory Service of Ukraine for non-admission to adopt a Draft Order of the Ministry of Infrastructure

On 12.10.2020, a Draft Order of the Ministry of Infrastructure of Ukraine “On Approval of the Procedure for Fixing a Prohibition to Operate Freight Cars on Railway Transport” was published at the Ministry of Infrastructure of Ukraine official website.

This draft regulatory act proposed to determine a mechanism for prohibition to operate freight cars on railway transport, as well as to introduce assessment of the railway car residual life upon expiration of the assigned service life before each scheduled repair works, by extending the service life for a term not exceeding 3 years.

Interlegal associate attorney Dmitri Ochkolias comments, “In other words, if you are the owner of railway car whose service life has expired (for example, 30 years for a covered grain carrier), you would be completely deprived of mechanisms aimed to extend the service life of such railway car. The only solution is to purchase a new railway car”.

Interlegal lawyers assessed that provisions of Draft Order of the Ministry of Infrastructure would have resulted in decrease of the fleet of freight railway cars by 39%, which is equal to nearly 106 thousand cars, by 2028.
Therefore, over 67 thousand freight railway cars would have been written off. Meantime, in order to replace such a number of railway cars, business entities will need to spend over 93 billion UAH. Consequently, it may cause significant problems in providing transportation services, because there will be lack in the fleet of freight railway cars, so a significant share of cargos will be subject to carriage by means of alternative transport modes.
In addition, Ministry of Infrastructure of Ukraine did not offer any state support program.

Therefore, a Client – one of the largest car owners and operators in the railway transportation market – applied to Interlegal.

Interlegal law team analyzed promptly provisions of Draft Order of the Ministry of Infrastructure, including annexes thereto, jointly with explanatory note and analysis of regulatory impact, followed by monitoring the status of approval of the Draft Order. Based on the obtained information, it was decided to apply to the State Regulatory Service of Ukraine for non-admission to adopt the aforesaid Draft Order of the Ministry of Infrastructure.
In the process of the Draft Order consideration and analysis of its regulatory impact, there was detected an essential number of violations of the principles of state regulatory policy. Based thereon, State Regulatory Service of Ukraine rejected approval of the Draft Order of the Ministry of Infrastructure.

Interlegal associate attorney Dmitri Ochkolias, lawyer Nikita Kocherba and junior lawyer Karina Shakhbazian led the case.