Reform objective
To bring natural monopolies in the transport sector under regulation, ensure non-discriminatory access to markets, and create conditions for the sector development.
Mechanism
Creating a National Commission for State Regulation of Transport.
Instruments
The draft Law on “National Commission for State Regulation of Transport” as an alternative to draft law #3927 registered in the Verkhovna Rada.
Proposals
Creating a new central executive body with a special status, whose primary task will be the transparent setting of tariffs, regulation of participants’ access to markets, issuance of licenses, and administration of consumer access to transport markets. Today these functions are performed by the Ministry of Infrastructure of Ukraine.
Why is this essential for Ukraine?
Markets operating as natural monopolies need other regulatory tools than markets with free competition. Natural monopoly entities cannot set tariffs for their services on their own, as in this case, they would be cut off from reality.
State intervention in the tariff setting of natural monopoly entities is necessary: it is not only about economic development, but also about consumer protection. The creation of a collegial body will help achieve regulation that balances the interests of natural monopolies, consumers (passengers and cargo shippers), and the state.