Ukrainian Sanctions Hurt Russian Railways


Russian Railways (RZhD) are facing the lack of components for locomotives that Ukraine could provide. Vice CEO of Russian Railways has sent a letter to the Ministry of Industry and Trade of the Russian Federation asking to cancel the ban on imports from Ukraine of electric motors and generators, electricity generating sets, and rotating electric converters, Delfi.lt reported with reference to belprauda.org.

Starting in 2014, under the influence of Western sanctions, Russia has stepped up efforts to import substitution. Together with representatives of the EU and the USA, Ukraine then joined the sanctions regime. In 2018, the Russian Federation imposed its own sanctions in response. Among other things, Moscow introduced them against Ukrainian enterprises exporting their products to Russian territory.

However, the effect of the Russian package turned out to be exactly the opposite. Vivid confirmation of this suggestion is the problems that have arisen for RZhD. Indeed, according to the decree of the Government of the Russian Federation of December 29, 2018, imports were banned of Ukrainian electric motors and generators, electricity generating sets, and rotating electrical converters.

The problem is that Russia does not produce own equipment of the kind. The absence of these particular components called into question an RZhD’s investment program “Acquisition of traction rolling stock for the period 2019-2025”, with RUB 50-60 billion set to be allocated annually. It is this program that represents the only possibility for the Russian rail transportation system to avoid collapse.

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