Ukraine considers closing passenger railway connection with Russia

Ukraine is considering an option to close passenger
railway connections with Moscow, Infrastructure Minister Volodymyr Omelian told
a television network on Aug. 6, answering a question on the future of passenger
traffic between the Ukrainian city of Lviv and Moscow. Later on, he commented
to local media that such a decision is the authority of either the Cabinet of Minister
or the State Security Service or National Security and Defense Council, which
have yet to study it. Omelian clarified that such a measure can be applied as
one of the options to respond to Russia’s intensified aggression in the Azov
Sea, as well as the ongoing occupation of Crimea and eastern regions of
Ukraine.

Alexander Paraschiy: Ukraine
halted airline traffic with Russia in October 2015, so plans to stop railway
connections are not surprising. From a political standpoint, such an intention
is logical, given that Russia is an aggressor-state. From an economic
standpoint however, both the Ukrainian and Russian economies risk damage.
Millions of people continue to travel between Ukraine and Russia every year,
and railway is the most convenient way to do so.

Moreover, Ukrainian routes to Russian cities are among
the few profitable passenger routes of Ukrainian Railway (RAILUA) in 2017,
bringing about UAH 270 mln (USD 10 mln) in profits, according to lb.ua news
site. Overall, passenger transportation was deeply loss-making for the company.
Most likely, if such a decision is made, passenger traffic between Ukraine and
Russia will merely redirect itself through neighboring countries (e.g. Moldova,
Belarus), as has happened with airline routes.

We also believe this move could be related to the
approaching March presidential elections and Ukrainian government efforts to
reduce the destabilization risks related to them. Restricting Russian access to
Ukraine enhances security conditions ahead of the elections, which the
government views as more important than any profit off these routes.