Situation at Donetsk Railroad

Situation at Donetsk Railroad

A rally of railroad workers where they demanded their salaries took place in Yasynuvata, which is situated on the occupied territory of the Donetsk region, on May 28, 2016. The rally attracted a lot of media attention and contributed to stigmatization of the residents of occupied territories.
 
Railroad workers who remained on the occupied territory were told that they themselves wanted “to separate from the rest of the country” and get “DPR” salaries, so it was only their fault that they suffered from the consequences of their own decisions.

However, railroad workers that took part in the rally work, in fact, at a Ukrainian enterprise though Yasynuvata is not under Ukrainian control.

“Donetsk Institute of Information” prepared a memo about the key facts connected with the situation.

Influence of hostilities on Donetsk Railroad work

Railroad is a key for industrial stability of the Donetsk region. Before the war, in 2013 – the weight of the cargo transported by “Donetsk Zaliznytsya ()”, which worked on the territory of the Donetsk, Luhansk, partially Zaporizhzha, Kharkiv, Dnepr regions, was 37.1% , a bit more than one third.

The main cargo – 56% – was coal. The hostilities influenced the work of the railroad considerably. In July-October, 2014, transportation by railways decreased by1.8 times in comparison with the third quarter of 2013; transportation by Donetsk railroad got twice lower, and the transportation of coal decreased by 2.5 times. The last information about the work of Donetsk railroad presented by the regional statistics department was the results of 2014.

That year the railroad transported 74.3 million tons of cargo, that is 23.1% lower than in 2013. Coal transportation, that was 53.6% of the total railway transportation in comparison with 2013, was 34.4% lower.

According to the Coal Ministry, 85 coal mines of different forms of property are located, on the territory of the Donetsk and Luhansk regions which are not controlled by Ukraine, that is 57% of the total number of mines in Ukraine. 60 out of them extract thermal coal and almost 100% of anthracite which the majority of Ukrainian thermal power plants consume. That is why the most popular cargo transported by the railroad is coal.

How does railroad work in “DPR”?

Though hostilities make the work of Donetsk railroad more complicated, it did not stop its work. According to the department of the basic branches of industry of the Donetsk region of the Donetsk regional state administration, in fact, there was a united railway enterprise which worked till December 2015 on the territory of the region divided by the front line.  It was “Donetska Zaliznytsya”. Its main office is located in the city of Donetsk and was seized by armed militants of “Donetsk People's Republic” in May 2014.

Before the war, Donetsk railroad included four directorates of cargo transportation. Only one of them – Krasnoliman Directorate – is left on the territory controlled by Ukraine. At the same time, big industrial enterprises in the Donetsk and Luhansk regions, which are served by Donetsk railroad and continue working on the uncontrolled territory, pay taxes to Ukrainian budgets at different levels. First and foremost, they are heavy industry enterprises.

Does Donetsk railroad deal with smuggling?

The Ukrainian Ministry of Energy and Coal Mining allowed Ukrainian thermal power plants to consume fuel from the temporarily uncontrolled territories delivered by Donetsk railroad.

According to the directorate data, in 2015, “Donetsk Zaliznytsya” transported 69.1 million tons of cargo, almost the same volume as in 2014, including the delivery of cargo – 24.8 million tons from the uncontrolled territory to the controlled one, in particular, 15.6 million tons of coal. During the first 4 months of 2016, 10.5 million tons of cargo was transported, including 4.1 million tons of thermal coal. As one may see, the hostilities  did not influence greatly the work of the enterprise in 2015 though there is a noticeable decline in the first quarter of 2016.

Conflict over the control of Donetsk railroad

Diarchy remained in Donetsk railroad till the end of 2015 when a regional structural branch of “Ukrainian Railroad” – “Donetsk Zaliznytsya” – was created on the basis of Krasny Liman directorate of railway transportation.

On January 27, 2016, there was a meeting in the regional state administration. It was devoted to the issue of developing the mechanism of interrelations between the created regional branch and state enterprise “Donetsk Zaliznytsya” (the aim of the meeting was to maintain transportation of cargo between controlled and uncontrolled parts of the region).

In March, contracts between public company “Ukrainian Zaliznytsya (Railroad)” and state enterprise “Donetsk Zaliznytsya” were void. The new branch does not have contracts with state enterprise “Donetsk Zaliznytsya”, that is why mutual financial settlement between them for transportation of cargo between uncontrolled and controlled parts of the region is impossible. The situation resulted in the absence of current assets of the enterprise which is on the uncontrolled territory.

According to the department of the development of basic industries of Donetsk regional administration, in June 2016, the number of employees working for “Donetsk Zaliznytsya” on the uncontrolled territory was 25 thousand people who stopped getting salaries and wages. The total debt amounts to 242 million hryvnyas. The workers are offered to be transferred to the new enterprise – the regional branch of “Donetsk Zaliznytsya”.

On May, 28, there was a rally at the railway station of Yasinuvata which is located on the uncontrolled territory. The participants demanded from the Ukrainian power to pay the debts, and then railroad workers stopped the railway transportation between the controlled and uncontrolled parts of the Donetsk region. “DPR” representatives tried to turn the rally into an anti-Ukrainian protest. It should be noted that all mass acts on the uncontrolled territory are held under the supervision of “DPR” organization.

According to the information of “DPR” transportation ministry, on July 11, trains started moving again, and the payment of debts on wages became the issue discussed at the talks.

Conclusions

The “DPR” organization reresentatives’ desire to turn the protest into an anti-Ukrainian one failed. Since the beginning of hostilities, state enterprise “Donetsk Zaliznytsya” has been under double control – by the Ukrainian power and by “DPR” organization. It continues to serve businesses located on the uncontrolled territory, but pays taxes to the Ukrainian budget.

Railway workers demands to Ukrainian power to pay the debts are grounded and justified. “DPR” organization installed monopoly of holding rallies and is trying to use the situation for its propaganda purposes. The railroad located on the uncontrolled territory is an integral part of the Ukrainian railway and is a part of its railway system and industrial chains, so it cannot work effectively being autonomous.

Ukrainian officials should restrain from sharp claims in respect to the rally partcipants who demand to pay the debts from the legal power. Stable work of Donets railroads will help preserve the economy of the uncontrolled part of the Donetsk region in the economic space of Ukraine which will be a bridgehead for its further reintegration in case of a successful peaceful reintegration or a military operation.