Business news from Ukraine

NEW BESKYDSKY TUNNEL TO BE OPENED ON MAY 25, 2018

Ukrzaliznytsia plans to finish construction of the new Beskydsky tunnel on May 25, 2018 and starts new large-scale infrastructure projects for over UAH 10 billion, Ukrzaliznytsia acting Board Chairman Yevhen Kravtsov has said.
“We plan to finish the project, which was to be completed this autumn, earlier. The Beskydsky tunnel is to be opened on May 25, 2018,” he said at a press conference in Kyiv on Tuesday.
Kravtsov said that among new projects is a large-scale project on electrification of the Dolynska-Mykolaiv-Kolosivka section, which concerns the access to the Mykolaiv maritime merchandise port and is a strategic one for the agricultural sector of Ukraine.
He also recalled the project on electrification of the Potoky-Zolotnyshyne section, which is important for improving transactions in the metal and ore complex of the country.
“The electrification of the Kovel-Izov-the state borer is the access of Ukrainian cargo to the European markets. Today this is the narrowest place on our transport map,” Kravtsov said.
Among other things, he pointed out the importance of railway communication with Mariupol: this year the company will continue improving the capacity of the Kamysh-Zoria-Volnovaha-Mariupol section.
“We did a lot in the past year: we expanded [throughput] from 14-15 pairs of freight trains per day to 22. This is a significant increase in one year, and we plan to raise it to 28 before the end of this year,” he said.

UKRENERGO HEAD EXPECTS COMPANY TO BE REORGANIZED INTO PRIVATE ONE IN AUTUMN 2018

Head of national energy company Ukrenergo Vsevolod Kovalchuk hopes that the state-owned enterprise will be reorganized into a private joint-stock company in autumn 2018.
“There is a certain procedure, which should be passed step by step. If everything works perfectly, this process could be finished in August or early September 2018. This concerns the registration of our shares,” he said at a press conference in Kyiv on Tuesday.
As reported, the Cabinet of Ministers of Ukraine on November 22, 2017 approved the reorganization of state enterprise Ukrenergo into a private joint-stock company, 100% of which is state owned. All the property being on the balance sheet of the state enterprise, which ensures the integrity of the united energy system of Ukraine, dispatching management, trunk and interstate power grids, is assigned to the private JSC and not subject to alienation.
According to Kovalchuk, as part of the transformation, the company must conduct a stocktaking of assets, carry out the assessment of the value of the entire property complex of the enterprise and issue shares with their transfer to state ownership. At the same time, he recalled that the transformation to the private JSC as opposed to a public joint-stock company means the impossibility of buying and selling shares of the company on the stock exchange.
Ukrenergo operates trunk and interstate power grids, as well as conducts the centralized dispatching of the united energy system of the country. The company is a state enterprise. It is subordinated to the Ministry of Energy and Coal Industry, but it will be transformed into a private joint-stock company.

EXPORTS OF IT SERVICES IN UKRAINE 7% UP IN 2017

Exports of IT services from Ukraine in 2017 increased by 7.58% compared to 2016, to $2.485 billion ($2.31 billion in 2016), the IT Committee of the European Business Association (EBA) has told Interfax-Ukraine, with reference to a study of the National Bank of Ukraine (NBU).
“According to NBU preliminary data, the total volume of computer services exports for 2017 amounted to $2.485 billion, including operations for the sum less than $20,000 amounted to $842 million,” the report said.
According to the previously unveiled infographics of the IT Ukraine profile association on its website, exports of IT services in Ukraine in 2017 grew by 20% compared to 2016, to $3.6 billion.
The EBA is a non-governmental organization uniting more than 900 European, international and domestic companies operating in Ukraine. It was established in 1999 on the initiative of the European Commission, which is interested in supporting European business in Ukraine and establishing bilateral relations between Ukraine and the EU.
The IT Committee of the EBA is an industrial association of companies engaged in production of software and provision of software services.

UKRAINE’S SEAPORTS INCREASE CARGO HANDLING BY 11% IN JAN, 2018

Ukraine’s seaports handled 10.8 million tonnes of cargo in January 2018, which is 10.9% more than in the same period in 2017, according to live data from the Ukrainian Sea Ports Authority.
According to its data, the volume of transshipment of exported cargo fell by 1.1% compared to the previous year, to 7.8 million tonnes, imported cargo increased by 70% and amounted to 2.1 million tonnes.
Growth in exports was recorded for metals and metal products – 1.5 million tonnes (21.2% compared to January 2017), containers – 26,300 TEU (a 17% growth), grain – 3.1 million tonnes (growth by 1.1%).
Transshipment of imported coal amounted to 700,000 tonnes (112.3% more than in January 2017), import of ore cargo to 700,000 tonnes (42% more), oil to 80,000 tonnes (in January last year there were no transshipment), petroleum products to 50,000 tonnes (16% more), and containers to 26,900 TEU (5% more).
The decrease in imports was observed for construction cargo (80,000 tonnes, or 35.4% less) compared with January last year.
In general, the seaports of Ukraine processed 913 vessels in January 2018, which is 291 vessels, or 46.8% more compared to the same period in 2017.

BORYSPIL INTERNATIONAL AIRPORT (KYIV) INTRODUCES NEW DISCOUNTS FOR AIRPORT CHARGES

State-owned enterprise Boryspil International Airport (Kyiv), the largest airport of the country, has introduced new discounts for airport charges.
According to the document posted on the airport’s website, it is intended to increase competitiveness of the Boryspil airport, boost passenger flow and airport’s revenue, expand the flight network and attract new carriers to the airport, as well as stimulate airlines as commercial partners of the airport.
Among the charges that are levied at the airport, the following are
indicated: the passenger service charge at the terminal and the charge for taking off/landing the aircraft. According to resolution No. 37 of the Ministry of Infrastructure, the take-off/landing charge for international flights is $10.50 per 1 tonne of maximum take-off weight; for domestic flights – $1.05.
The passenger service charge at the terminal for international flights is
$13 for each passenger; $8.50 for each transit passenger; $2.50 for each domestic passenger.
The base year for calculations is 2017. With the increase the number of passengers serviced by the carrier on regular international flights in the current month in comparison with the same month of the base year, the increase in the servicing of these passengers is calculated. Taking into account the monthly increase, the following discounts can be applied to the charge for the servicing at the terminal: in the first year, a reduction factor of 0.2, the second – 0.4, the third – 0.6 and the fourth – 0.8.
When the carrier increases the number of international regular flights serviced in the current month, the indicator of their increase is calculated. Based on this, the same coefficients as described above can be applied to take-off/landing charges.
When an airline carries transit passengers a coefficient of 0.2 is applied to the charge for servicing at the terminal.
According to the document, discounts are used for passenger servicing at the terminal, the size of which depends on the number of passengers serviced per month.
So with the number of up to 4,999 passengers per month, a discount is not provided. From 5,000 to 9,999 passengers per month it will be 5%; from 10,000 to 19,999 – 10%; from 20,000 to 29,999 – 15%. The maximum discount can be 55% when transporting more than 260,000 passengers per month.

UKRAINE RAISES AGRICULTURAL EXPORTS TO EUROPEAN COUNTRIES BY 37% IN 2017

Exports of Ukrainian agrarian products to European countries in January-December 2017 amounted to $5.8 billion and increased by 37.1% compared to the same period in 2016, the Ministry of Agrarian Policy and Food has said.
According to the ministry’s website, the main Ukrainian products that were supplied to the EU market in 2017 were cereals ($1.7 billion), oil ($1.4 billion), and oilseeds ($1.1 billion).
The ministry notes that the growth of Ukrainian exports to the EU in 2017 was also due to the increase in the supply of niche processed and ready-made food products.
In particular, exports of poultry last year rose compared to 2016 by $64.9 million, to $133.7 million, bakery products and cereals by $32.4 million, to
$96.1 million, juices by $28, 3 million, to $70.7 million, honey by $25.5 million, to $98.8 million, confectionery products by $15.4 million, to $38.2 million.
The top five trade partners of Ukraine in the EU were the Netherlands with a share of 18%, Spain with 14.3%, Poland with 13.2%, Italy with 12%, and Germany with 10.5%.
“Last year we also imported 17.2% more European agricultural goods than in 2016. Overall, imports amounted to $2.3 billion. The main commodities of our imports were tobacco and tobacco goods, chocolate and products from cocoa beans, feed for animals, alcoholic drinks and other food,” Deputy Minister of Agrarian Policy and Food for European Integration Olha Trofimtseva said.