Kriukov Car Building Works (KCBW, Kremenchuk, Poltava region) tentatively produced marketable products worth over UAH 8 billion in 2019, which is 43.7% more than a year ago, Chairman of the enterprise’s supervisory board Volodymyr Prykhodko has said.
“According to current data, we have manufactured marketable products worth more than UAH 8 billion. The growth rate compared with 2018 is 143.7%, the sales rate is more than 157%,” he said in an interview with the corporate newspaper posted on the company’s website.
According to Prykhodko, 5,280 freight cars were assembled over the past year and this is 43.2% more than a year earlier (3,686 units).
“The plant worked all year with full load, twice we raised wages… The average salary reached UAH 16,500. Not all industrial enterprises of Kremenchuk managed to stay at that level,” the head of the supervisory board said.
Some UAH 715.7 million of taxes were paid to the budget and funds, including UAH 162.4 million to the local budget.
Prykhodko said that the goal of the enterprise for 2020 is to maintain the position of 2019 and increase the share of exports (he did not give a share for 2018).
He also said that in 2020 the KCBW intends to double (up to 6) the number of developments in the field of new technology, and plans to create an independent testing center on the basis of the existing one.
He also announced plans to double investment in enterprise development, without specifying the figure.
Ukraine’s gross foreign debt as of October 1, 2019 reached $119.95 billion, which is $4.44 billion or 3.8% more than in a quarter earlier, the National Bank of Ukraine (NBU) has reported. According to the central bank, as for GDP the debt fell from 83.5% to 82.3% of GDP.
The NBU recalled that at the beginning of this year, gross external debt amounted to $114.71 billion, or 87.8% of GDP.
“The growth of external debt [in the third quarter] was mainly due to an increase in the external liabilities of the private sector of the economy, which grew by $4.4 billion, to $69.7 billion, or 47.8% of GDP,” the regulator said.
The NBU said that the volume of public sector debt to nonresidents in July-September remained virtually unchanged and remained at the level of $50.2 billion (34.4% of GDP). In particular, the external liabilities of the general government sector increased by $0.4 billion, to $43.0 billion (29.5% of GDP). The main reason was the active purchase of government bonds by nonresidents, the obligations on which increased by $1.8 billion.
At the same time, $0.7 billion on 2015 eurobonds were repaid, and another $0.4 billion was the net repayment on direct government loans, including $0.33 billion under the Stand-By Arrangement and Extended Fund Facility (EFF) to the International Monetary Fund (IMF).
Due to exchange rate changes, the volume of external obligations on government loans decreased $0.3 billion, while on debt securities denominated in hryvnia, it grew by $0.1 billion, the NBU said.
According to the data, the external debt of the central bank decreased by $375 million as a result of planned depreciation of payments on Stand-By loans and as of September 30, 2019 the debt amounted to $7.2 billion.
The volume of external debt of banks decreased in the third quarter by $0.1 billion to $4.9 billion, while the volume of external debt of other sectors of the economy increased by $4.1 billion, to $54.7 billion. This was due to the placement of $1.8 billion eurobonds, an increase in obligations on non-guaranteed loans and borrowings by $0.5 billion and an increase in obligations on trade loans by $1.9 billion.
Intercompany debt of enterprises in direct investment relations increased by $ 0.4 billion to $ 10.2 billion.
Overdue debt on non-guaranteed loans in the real economic sector (including from direct investors) decreased $0.5 billion during the quarter and amounted to $21.5 billion (14.8% of GDP) at the end of the third quarter of 2019.
The National Bank said that as of the end of September, the U.S. dollar remained the main currency of external borrowing of Ukraine with the share of 68%, however its share decreased 1.6 percentage points.
The share of liabilities in SDRs to the IMF also decreased, from 10.3% to 9.3%, while the share of borrowings in euros increased from 14.9% to 16%, and in hryvnia – from 2.7% to 4.2% The volume of liabilities in Russian rubles during the quarter remained virtually unchanged and amounted to 1.7% of the volume of external liabilities.
The volume of short-term external debt with a residual maturity increased by $2.8 billion and amounted to $48.9 billion as of September 30, 2019, the regulator said. The NBU said that the liabilities of the public sector (government and central bank), which should be repaid over the next 12 months, increased by $1.1 billion, to $5.9 billion mainly due to future payments on debt securities, then short-term liabilities of banking sectors fell $0.1 billion, to $1.2 billion
The total volume of real economic sector liabilities to be repaid over the next 12 months (together with intercompany debt) increased $1.6 billion, to $40.3 billion as a result of an increase in debt on short-term trade loans by $2.1 billion, to $16.6 billion.
Gazprom, Naftogaz, Gas Transmission System Operator of Ukraine, and the Ukrainian Justice Ministry have signed a package of documents that allow to continue gas transit via Ukraine after December 31, 2019, consistent with the protocol of December 20, Gazprom said in a statement.
“Five days of continuous bilateral negotiations in Vienna have resulted in final decisions and final agreements. Also, the sides have signed a package of agreements and contracts as a big package deal, which restores balance of interests. The documents take effect today to ensure Russian gas transit via Ukraine after December 31, 2019,” Gazprom CEO Alexei Miller told the press.
“Gazprom has done its best and has yet again proven to be a responsible supplier and a reliable partner,” Miller said.
One of the documents signed by Gazprom and Naftogaz is an irrevocable settlement agreement, which stipulates withdrawal of every claim filed by the sides against one another in arbitration tribunals and criminal courts, on which no final judgment has been made as of yet, and prevents the sides from making claims in regard to gas supply and transit contracts of January 19, 2009, in the later period. Earlier, Gazprom paid $2.9 billion to Naftogaz awarded by the arbitration court in Stockholm within the period prescribed by the protocol.
Gazprom and the Ukrainian Justice Ministry concluded an irrevocable amicable agreement, which envisages termination of any current and possible future claims of Ukraine v. Gazprom based on the decision of the Ukrainian Anti-Monopoly Committee.
Gazprom and Naftogaz signed an agreement on organizing gas transit via Ukraine. “Naftogaz hereby undertakes to act as the transit organizer and assumes relevant risks,” Gazprom said.
Naftogaz and Gas Transmission System Operator of Ukraine concluded a transit agreement, while Gazprom and Gas Transmission System Operator of Ukraine signed an inter-operator agreement.
The transit organizer will provide transportation of 225 bcm of gas via the Ukrainian gas transmission system within a five-year period, including 65 bcm of gas in 2020 and annual 40 bcm of gas in 2021-2024.
Necessary compromise
The gas deal between Russia and Ukraine is a compromise which proves that Moscow and Kyiv are capable of reaching an agreement, Russian Prime Minister Dmitry Medvedev wrote on his page on the social network VKontakte.
“The gas contract concluded between Russia and Ukraine for the next five years is a compromise that had to be reached,” Medvedev said.
“The signing of these documents indicates that it is possible to discuss and reach an understanding even on the most difficult issues,” he said.
The Russian government and Gazprom had been working on settling the problem with Ukraine for quite some time, both in the bilateral format and in the trilateral format involving the European Commission, Medvedev said.
“All problems have been solved, and mutual claims have been dropped. Russian gas transit via Ukraine will continue on terms acceptable for all sides,” he said.
5-years signed, 10-year extension possible
A five-year contract for Russian gas transit to Europe via Ukraine has been signed, Ukrainian President Volodymyr Zelensky confirmed.
“This is the end of the year, and we have some achievements. Ukraine has signed a gas transit contract for five years, during which we will earn at least $7 billion. The sides may extend the contract for ten more years,” Zelensky said.
“The Ukrainian gas transmission system will be working, which means energy security and wellbeing of Ukrainians will be provided. At least 65 bcm of gas will be transited during the first year, in addition to 40 bcm of gas per annum within the four subsequent years. In fact, transit amounts can be larger. Europe knows that we will not let it down from the angle of energy security,” Zelensky said.
Ukraine is expecting the gas transit agreement to generate annual revenue of $2-3 billion for the next five years, Energy and Environmental Protection Minister Oleksiy Orzhel said.
The government website quoted Orzhel as saying following the Russian gas transit talks that “one of the conditions set by Ukraine at those negotiations was Gazprom’s payment of $2.9 billion awarded by the arbitration court in Stockholm. We have received these funds. Plus, considering full engagement of the Ukrainian gas transmission system and the fact that new gas delivery routes to Europe will not emerge for a long time, our transit earnings will amount to $2-3 billion annually for the next five years.”
Prime Minister Oleksiy Honcharuk, in turn, underlined the importance of the five-year contract on Russian gas transit to Europe via Ukraine.
“Our team has protected the national interests of Ukraine and has ensured acceptable terms for the gas contract. In signing this document, we were guided by the priorities of Ukraine’s energy security and the wellbeing of our citizens. Thanks to this contract, Ukraine will maintain stability on the domestic and European gas markets. That will have a positive effect on energy markets and serve as a significant factor in reducing gas market prices,” the website quoted Honcharuk as saying.
The Ukrainian gas transmission system will transport 65 bcm of Russian national gas in 2020 and 40 bcm of gas per year for the next four years. The actual amounts may be larger.
Gas transit via Ukraine could come to 75 billion cubic meters in 2020, Andriy Kobolev, the head of Ukraine’s Naftogaz, told a press conference in Kyiv.
He said the forecast was based on 90 bcm transit in 2019 less 15 bcm due to the commissioning of the TurkStream pipeline.
Naftogaz and Gazprom have signed a settlement agreement which stipulates mutual withdrawal of lawsuits, Naftogaz Executive Officer Yuriy Vitrenko said.
“When I was signing the settlement agreement, which stipulates mutual withdrawal of all lawsuits, I felt sorry for the work and knowledge invested by my team in their preparation. […] Still, I realize that our responsibility to the Ukrainians requires that we make decisions to the benefit of the national company instead of our own benefit,” Vitrenko wrote on Facebook.
Continuation of gas transit via Ukraine means thousands of jobs and lower gas fees for Ukrainian households, while the $12.2-billion claim filed with the arbitral tribunal has helped extend the transit contract, he said.
“In other words, we could have won the $12.2-billion claim in the arbitral tribunal only if Gazprom had refused to continue transit. But it did not,” Vitrenko said.
The gas transit deal made between Naftogaz and Gazprom for 2020-2024 is based on the “take or pay” principle, Vitrenko said.
“The fact that we have signed the transit contract based on the ‘pump or pay’ principle is an extraordinary event in this context. I should say this is the first time in the history of Ukraine that Gazprom has concluded a transit contract on the basis of the European ‘pump or pay’ principle. Earlier, Gazprom relied on the ‘take or pay’ principle, which was similar but disadvantageous for Ukraine and lucrative for Russia, only in the area of gas supply,” Vitrenko wrote on Facebook.
Nord Stream sanctions
Naftogaz twice thanked the United States for putting pressure on Moscow and Europe in a press release regarding the conclusion of a package deal with Gazprom.
Gazprom, Naftogaz, and Gas Transmission System Operator of Ukraine signed a package of agreements in Vienna on December 30 to ensure further transit of Russian gas to Europe via Ukraine through 2024.
“This result was backed by a systemic effort of Naftogaz team in preparation of Ukraine to the negotiations as well as the imposition of the U.S. sanctions related to Nord Stream 2 project,” Naftogaz said.
“The package includes the following documents:
1) interconnection agreement between GTSOU and Gazprom establishing technical procedures and rules for cooperation between the operators of the adjacent networks;
2) agreement on organization of transit between Naftogaz and Gazprom setting conditions and transit volumes for the next five years; and
3) settlement agreement between Naftogaz and Gazprom according to which both parties abandon mutual claims under the 2009 contracts,” Naftogaz said.
The three agreements have been signed to fulfill the protocol of the 19-20 December meetings in Berlin and in Minsk, which involved representatives of the EU, Ukraine, Russia, Naftogaz, Gas Transmission System Operator of Ukraine, and Gazprom.
“The protocol included the following provisions:
– USD 2.918 billion compensation paid by Gazprom under the Stockholm Arbitration Awards of December 2017 and February 2018 and received by Naftogaz on 27 December 2019;
– withdrawal from all arbitration proceedings where final decisions have not been rendered yet;
– lifting attachment from Gazprom’s property, assets and monetary funds and refusing from any future claims and proceedings under the contracts signed in January 2009; and
– minimal transit volumes: 65 bcm/year for 2020 and 40 bcm/year for 2021-2024,” Naftogaz said.
“The issue of gas supply was not subject to the package agreements. Naftogaz noted Gazprom’s interest in resuming gas supply to Ukraine in future with the pricing based on the NCG price,” it said.
“The package deal also does not affect Naftogaz Group’s claims against the Russian Federation regarding the assets seized in Crimea,” Naftogaz said.
“The concluded agreements will provide Ukraine with guaranteed revenues from gas transit over the next five years. The certainty of future gas transit creates a necessary environment for continuation of the domestic gas market and broader energy reforms, secures gas transmission jobs and future contracts with Ukrainian industrial producers related to the maintenance of the Ukrainian gas transmission system,” Naftogaz said.
“The agreements that have been signed today are a result of an acceptable compromise. The major outcome of the negotiations is that we have received almost USD 3 billion from Gazprom, and ensured that the Ukrainian system will be able to operate without a loss over the next five years. The transit won’t be interrupted, and will be performed by the independent certified operator. We have demonstrated Ukraine’s reliablility as a transit partner for the EU. Our team is grateful to the European Commission for its consistent position and certifying that the Ukrainian GTS is reliable and efficiently managed. We are also grateful to the U.S. for their firm support of energy security in Europe,” Naftogaz CEO Andriy Kobolyev said.
According to information on the website of the Verkhovna Rada of Ukraine, on December 27 the document was returned with the signature of the president.
As reported, the Verkhovna Rada adopted as a whole bill No. 2240 on settling the issue of amber extraction, which provides for the introduction of uniform exploration permits with the right to produce amber for a period of five years on plots of up to 10 hectares through ProZorro electronic auctions.
This decision was supported by 279 MPs with the quorum being 226 votes.
According to the bill, access to amber deposits will be regulated by establishing the right of land easements and defining separate Article 971 of the Land Code for exploration and mining on disturbed lands.
In addition, the document introduces criminal liability for illegal mining and administrative liability for violation of mining requirements, as well as toughens liability for non-compliance with land reclamation requirements and the obligation to compensate for losses incurred.
Prominvestbank (PIB, Kyiv) has closed six branches in Ukraine since October 2019, leaving only one in Kyiv, the bank has told Interfax-Ukraine.
According to the report on the website of the financial institution, from January 3, 2020 all legal entities that are clients of Prominvestbank will be serviced in the bank branch at 28 Perova Boulevard.
According to the National Bank of Ukraine, at the beginning of 2019 the regional network of Prominvestbank totaled 56 branches.
As reported, at the end of November 2019 PIB announced the closure of current accounts of individual entrepreneurs, and in early December the termination of cooperation with Mastercard and termination of servicing the card accounts of legal entities.
The shares of the Ukrainian subsidiaries of Russian banks, including PIB, were seized in 2018 by the decision of a Ukrainian court in connection with the statement on securing a lawsuit of a number of companies related to businessman Ihor Kolomoisky, which had assets in Crimea.
The State Executive Service seized Prominvestbank’s shares, after which an auction for their sale was scheduled for August 28, 2019 (the starting price of the package is UAH 532.099 million), however, the PFTS exchange did not receive bids for its purchase within the prescribed period.
The Ukrainian architectural company Archimatika (Kyiv) has opened the office Archimatika Norge AS. in Oslo, Norway, the company said on its Facebook page.
“We are pleased to announce that Archimatika has opened an office in Oslo – Archimatika Norge AS. Our Norwegian department consists of nine experienced architects, but it will have all Archimatika resources in Kyiv with more than 250 architects, designers and engineers,” the company noted.
According to the report, Archimatika Norge AS will provide services of urban planning, designing of residential, office, commercial real estate, territory planning, research, technical supervision, development of technical documentation and supervision of construction projects.
Currently, the office in Norway has already taken up several projects at various stages, including, in particular, territory planning and preparation of documents.
Archimatika was founded in 2005 by architects Dmytro Vasilyev and Oleksandr Popov.
According to the company, more than 7.6 million square meters of residential and public buildings were designed during its operation. The project portfolio at the design stage as of December 2019 consists of more than 3.5 million square meters.
The company employs 270 people. Currently (December 2019), the company has three offices in Kyiv, Moscow, and Oslo.
