The Cabinet of Ministers of Ukraine has approved the allocation of UAH 16 billion for a state order for passenger rail transportation in 2026. This decision is aimed at ensuring the stable functioning of domestic routes and maintaining the accessibility of transport services for citizens.

According to Government Order No. 196 of March 2, funds were transferred to the Ministry of Community and Territorial Development to organize domestic passenger transportation. Financing is provided on a non-refundable basis and will be carried out quarterly at the expense of the state budget reserve fund, which guarantees the stability of payments throughout the year.

As part of the new approach, the government is launching an experimental state order mechanism for domestic long-distance passenger transportation. The total budget of the project is UAH 16 billion and covers all major domestic routes, while ensuring strict control over the execution of flights.

The model provides for compensation to Ukrzaliznytsia of the difference between the actual cost of transportation and the ticket price. This approach allows maintaining socially affordable tariffs for the population without losses for the state carrier.

Previously, the traditional system of financing passenger transportation proved to be ineffective due to the reduction of freight transportation and the increase in losses of Ukrzaliznytsia. This is what prompted the government to develop a new model, known as PSO (Public Service Obligation), which provides for state compensation for the difference between socially justified tariffs and the carrier's actual costs.

The implementation of the experimental model will allow not only to preserve existing routes, but also to create a transparent system of control over costs and efficiency of transportation, which is important for supporting Ukraine's transport infrastructure in the long term.