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Business news from the Ukrainian League of Industrialists and Entrepreneurs

LAZ TO DELIVER 289 BUSES WORTH $70 MLN TO EGYPT

KYIV. July 1 (Interfax-Ukraine) – City Transport Group, the managing company of Lviv Bus Plant (LAZ), on June 28 signed a contract to supply 289 buses to the transport service of Cairo (Egypt) during the year.

According to the press service of the Ukrainian Embassy in Egypt, the contract is worth $70 million.

The contract was signed in the presence of Egypt Prime Minister Ibrahim Mehlab and Cairo Governor Galal el-Saeed, as well Ambassador of Ukraine to Egypt Hennadiy Latiy.

The report notes that the final assembly of the buses will take place at the facilities of Ghabbour Auto in Ain Sukhna.

An informed source has told Interfax-Ukraine that negotiations on the supply of LAZ buses to Egypt have been held for two years. It did not specify the details of organizing the production of such a large batch of LAZ buses at the holding, which is currently preparing to resume production at plants in Lviv and Dniprodzerzhynsk which was halted in 2014.

FOREIGN RAILWAY COMPANIES COULD BE INTERESTED IN CONSORTIUM TO INVEST IN UKRAINIAN RAILWAYS – OFFICIAL

KYIV. June 30 (Interfax-Ukraine) – Railway companies and investors, such as Germany’s Deutsche Bahn, Poland’s PKP, France’s SNCF and U.S. Railroad Development Corporation, could be interested in joining an international consortium to invest funds in large sections of Ukrainian railways, Deputy Prime Minister of Ukraine Valeriy Voschevsky wrote on his Facebook page after a meeting with U.S. economist and private lecturer in Kyiv School of Economics Russell Pittman, who is involved in the realization of railway reform projects.

Voschevsky said that international creditors, such as the European Bank for Reconstruction and Development (EBRD) and World Bank, could realize railway projects.

“We came to the common opinion that it is impossible to reorganize the Ukrainian economy without the proper reorganization of Ukrainian railways. Our economy depends on production and sale of coal, iron ore, steel and agricultural products, and they are to be delivered to Ukrainian and export markets by rail,” he wrote.

He said that the first important step towards creating the railway system would be removing corruption.

“As soon as we manage to do this, we will have to find ways of attracting investment,” he said.

He also said that the state has fallen short of its own resources in funding the organization and effective operation of Ukrzaliznytsia.

INFRASTRUCTURE MINISTRY TO APPLY OPEN SKIES PRINCIPLE AT ODESA AIRPORT FROM JUNE 30

KYIV. June 30 (Interfax-Ukraine) – The Infrastructure Ministry of Ukraine will apply the open skies principle at Odesa airport from June 30, Infrastructure Minister Andriy Pyvovarsky said at a briefing on Friday.

“We decided together with the State Aviation Service and Odesa Regional State Administration to [initiate] ‘open skies’ at Odesa airport. The State Aviation Service will inform transporters about it soon,” he said.

In turn, Odesa Governor Mikheil Saakashvili said that the price for air travel should fall as a result of the initiative, adding that the government closing its eyes to the schemes of oligarchs can never make things better.

“Many countries have experience; there must be reforms in the field. And everybody should be allowed [to provide air travel services], let the people choose,” he said, going on to note the strong monopolization of the commercial flights market in Ukraine.

 

TURKCELL BUYS SCM’S 44.96% STAKE IN ASTELIT FOR $100 MLN

KYIV. June 30 (Interfax-Ukraine) – Turkish-based Turkcell telecoms operator has announced it has signed a share purchase agreement (SPA) to acquire SCM Holdings Limited’s 44.96% stake in its Dutch-based subsidiary Euroasia Telecommunications Holding BV, in which Turkcell currently owns 55.04% stake and which in turn owns 100% of LLC Astelit, operating under the brand “life:)” in the Ukrainian mobile market.

As Turkcell said on the Borse Istanbul on Friday, SCM’s 44.96% stake will be acquired for $100 million. The total consideration amount will be paid on the closing date.

Conditions as per the SPA include the payment of $100 million as the consideration amount of the acquisition of SCM shares; payment of Astelit’s debts obtained through and with guarantee of SCM Group, termination of all guarantee agreements to which SCM Group is party; and release of SCM Group in this regard.

As was reported, on June 18, Turkcell announced a decision taken by its Board of Directors to start talks on the purchase of the stake in Astelit from SCM.

UKRAINIAN WEATHER CENTER PREDICTS 2015 GROSS GRAIN HARVEST COULD BE 60 MLN TONNES

KYIV. June 30 (Interfax-Ukraine) – The gross grain, legume and cereal crops harvest in Ukraine in 2015 could total 59.5-60 million tonnes, head of the agrometeorological department at the center, Tetiana Adamenko, has said.

“According to the preliminary forecast of grain, legume and cereal crops harvest, taking into account official data on sowed fields, Ukraine could receive 59.5-60 million tonnes,” she said at a briefing in Kyiv on June 26, adding that over half of the harvest will comprise of corn – around 26 million tonnes.

The expert said that corn fields in Ukraine are in a good state, and the average yield is predicted at the level of the previous year – 6 tonnes per hectare. The best yield – around 8 tonnes per hectare will be reaped in western regions (Vinnytsia, Volyn, Khmelnytsky and Lviv region) and in northern regions (Zhytomyr and Chernihiv regions) it will be lower – 7-7.5 tonnes per hectare.

Rains which will occur in Ukraine this week would have favorable effect on corn and other late crops – soybeans and sunflower, Adamenko said. However the rain could delay the ripening and harvesting of early grain crops.

The winter wheat harvest could total 24.5 million tonnes (with an average yield of 3.7 tonnes per hectare in 2014), winter barley – 3 million tonnes, spring barley – 4.2 million tonnes, winter rye – 300,000 tonnes, oats – 500,000 tonnes and buckwheat – 100,000 tonnes.

YATSENIUK: UKRAINE MUST HAVE 100% OF ITS OWN GAS PRODUCTION IN TEN YEARS

KYIV. June 30 (Interfax-Ukraine) – Prime Minister of Ukraine Arseniy Yatseniuk has said that Ukraine should switch to exclusively domestic natural gas extraction by 2025.

“We have a common task: in ten years Ukraine must completely, by 100%, to meet its own natural gas needs”, he said in the program “Ten Minutes with Prime Minister” broadcast on Sunday.

Yatseniuk stressed that one must increase the amount of natural gas extraction to fulfill this task, “but at the same time to reach market gas price.”

According to him, Ukraine has several targets: to become energy independent country, to increase production of Ukrainian gas so that to finally get rid of the “gas needle” of the Russian Federation, to reduce energy resources consumption and to make the state’s economy energy efficient and competitive.