Business news from Ukraine

Business news from Ukraine

FULL TRANSITION TO INSURANCE MEDICINE IN UKRAINE TO TAKE PLACE IN 2020 – DEPUTY PRIME MINISTER ROZENKO

KYIV. Oct 3 (Interfax-Ukraine) – Full transition to insurance medicine and the medical reform in Ukraine should take place within three years: a gradual transition to the application of the principles of health insurance is to begin in 2017, while the final model to be formed in 2020, the press service of Deputy Prime Minister of Ukraine Pavlo Rozenko said.

“According to our program, the full transition to insurance medicine and medical reform should take place within three years in order not to shock either people or the doctors’ community,” the press service quoted Rozenko.

The deputy premier said that the health system is switching from the principle of financing of hospital beds to the principle of financing services provided to patients. The mechanism of “money follows the patient” is introduced.

“This process is complicated and painful. It is not fully accepted by the medical community as it is necessary to go through the competition, improve the quality of services,” Rozenko said.

In early September Deputy Health Minister Pavlo Kovtoniuk said the Ministry of Health plans to introduce a plan of implementation a national health insurance system in Ukraine in 2017. It involves changes in the legal framework, including laws, the adoption of the Cabinet decisions.

According to Ukrainian insurers – participants of the sixteenth International Financial Forum, which was held in Odesa on September 14-17, 2016, voluntary development and implementation of compulsory health insurance are in need of stimulation, in particular, by supporting bill No. 4981 “On Compulsory Social Health Insurance in Ukraine”, organizing its promotion and refinement in the relevant committees of the Verkhovna Rada.

Head of the Health Committee of the Verkhovna Rada Olha Bohomolets registered alternative bill No. 4981-2 in the Verkhovna Rada in early August. The bill provides for the introduction of compulsory state social health insurance in Ukraine from January 1, 2018.

 

UKRGAZVYDOBUVANNIA SUCCESSFULLY CARRIES OUT FIRST HYDRAULIC FRACTURING USING OWN EQUIPMENT

KYIV. Oct 3 (Interfax-Ukraine) – Public joint-stock company Ukrgazvydobuvannia has successfully carried out first hydraulic fracturing operations using own equipment, the company’s press service has reported.

The press service said that after dry well stimulation its gas flow rate reached 48,000 cubic meters a day. It is expected that the well will be used optimally with the production rate of 74,000-90,000 cubic meters a day. After its connection the operation of the well will start.

Around 100 hydraulic fracturing operations were carried out in 2000s by the equipment the company now uses for hydraulic fracturing, but due to unskilled specialists and low quality of materials the efficiency coefficient then was around 30% instead of the 70% acceptable for industry.

The press service said that after three years of idle period of hydraulic fracturing equipment Ukrgazvydobuvannia repaired it and expanded with modern equipment. The company used modern materials and introduced advanced preparation methods. The company also involved the best team of foreign specialists in Eastern Europe.

“Successful first hydraulic fracturing operations open a new horizon to increase gas production by Ukrgazvydobuvannia. We use the most modern technologies, attract equipment and competence of global technological leaders such as Halliburton and Weatherford. This program would be successfully expanded with the involvement of servicing companies Belorusneft and Tacrom that offered the better price for stimulation operations. Our top priority is to boost hydrocarbon production. We are trying to do this as effectively as possible,” Production Director Yuriy Nahorniak said.

GOVERNMENT TO CREATE COMMITTEE FOR RESTORING UKRAINIAN INDUSTRY – PM

LVIV. Oct 3 (Interfax-Ukraine) – Ukraine’s Cabinet of Ministers plans to create the committee for restoring Ukrainian industry in October, Ukrainian Prime Minister Volodymyr Groysman has said.

“In October we plan to create the committee for restoring Ukrainian industry. Ukrainian industry today is on the roadside and requires government support,” he said at a briefing in Lviv on Friday.

The prime minister said that the government intends to establish cooperation between enterprises that lost traditional markets and help in searching for new markets for their products.

“It is important that we not only sell grain in the amounts of millions of tonnes, but also sell products processed in Ukraine,” Groysman said.

He said that the Office for Accompanying Investment will be created at the next government meeting.

GERMAN, JAPANESE INVESTORS TO HELP BUILD PODILSKO-VOSKRESENSKY BRIDGE – KYIV MAYOR

KYIV. Oct 3 (Interfax-Ukraine) – Kyiv authorities are attracting investors from Japan and Germany to implement a project to build the Podilsko-Voskresensky Bridge, Kyiv Mayor Vitali Klitschko has said on TV Channel Newsone.

“I promised to Troyeschyna residents that the Podilsko-Voskresensky Bridge would be opened in Klitschko’s tenure… I discussed cooperation issues in Japan and Germany. We are mulling many options and attracting investors to help in the implementation of this project – construction of the bridge. The subway to Troyeschyna remains important for us. We will finish the project,” the press service said, citing Klitschko.

He said that according to the existing plans, 250 km of roads are to be repaired in Kyiv by the end of this year, adding that 200 km have already been repaired.

“I talked to Kyivavtodor and contractors – they provide a five year guarantee for the roads,” he said.

He said that movement of heavy trucks will be restricted in the city to prevent road damage. Weighing complexes are being installed at the entrances to Kyiv.

PIVDENMASH WELCOMES CHANCE TO RESUME ZENIT-3SL CARRIER FOR SEA LAUNCH

KYIV. Oct 3 (Interfax-Ukraine) – Pivdenmash (Dnipro) has welcomed a possibility of resuming production of the Zenit-3SL launch vehicle for Sea Launch project announced by the new owner of the platform – Russia’s S7 Group.

The enterprise said in a statement on Friday that after the recent signing of a contract between S7 Group and Sea Launch S.A. it was declared the intention of the new owner to bring the complex from the mothball state and begin the launching activity at the end of 2018.

“All the property of the Sea Launch complex, namely the ship Sea Launch Commander, the Odyssey platform on which the equipment of the rocket segment is installed, and ground equipment in the base port Long Beach (the United States) is adapted for storing, transporting, pre-launch servicing and for the launches of the Zenit-3SL launch vehicle. This launch vehicle is produced at Pivdenmash. Pivdenmash welcomes the opportunity to resume the Sea Launch project as part of international cooperation for the peaceful exploration of outer space,” the press service said.

The successful functioning of the Sea Launch project will help to satisfy the increasing needs of the launch services market and it meets the interests of the majority of market players. Also, it will ensure a fair settlement of disputes between the founders of the Sea Launch project in court, the Ukrainian partner of the project said.

The press service said that the Sea Launch project is an important component of the Ukrainian space industry development strategy. The participation in international commercial projects will ensure the development of the Ukrainian space mechanical engineering thanks to own activities, without direct government funding that is impossible in the current circumstances, the enterprise said.

“Taking into account the duration of the production cycle for LV Zenit, the first products may be dispatched in the second half of 2017 if the funding begins in October 2016. The existing facilities of Pivdenmash allow producing from four to six missile carriers per year,” the enterprise said.

FINNISH BUSINESS GROUP IN UKRAINE READY TO PARTNER WITH UKRAINIAN COMPANIES

Representatives of the Finnish companies that work in Ukraine have expressed interest in expanding economic ties with Ukrainian companies. Talks held with the Ukrainian League of Industrialists and Entrepreneurs (ULIE) with the participation of the Ambassador of Finland to Ukraine Mr Juha Virtanen resulted in an agreement to arrange a business forum in Helsinki in the near future. With this aim in view, representatives of the Ukrainian League of Industrialists and Entrepreneurs submitted their proposals in September. These issues were on the agenda of a meeting between the ULIE, Finland’s Embassy and businesses from both countries.

The partners expressed hope that domestic companies working in the chemical sector, information technology, the processing industry are ready for the development of cooperation, as they in many ways complement each other.

At the same time, the Finnish side said it was concerned about the improper development of the business and investment climate in Ukraine, and the high level of corruption, administrative and other obstacles also cause concern.

Unofficial corrupt “taxes” significantly increase the cost of logistics and production, and, consequently, the price of the final product. All this certainly reduces its competitiveness. The fact that a businessman from Zaporizhia finds it more profitable to ship goods from the Lithuanian port of Klaipeda than from the Ukrainian port of Odesa was given as an example at the meeting.

“The business community of Ukraine is well aware of the risks our partners are facing. Therefore, it is actively cooperating with the authorities, urging them to address these issues as soon as possible. Among them are the removal of tax and customs barriers for producers, including importers of necessary equipment, as well as the introduction of personal responsibility of officials for bribes,” ULIE President Anatoliy Kinakh said.

Prior to the meeting, a ULIE delegation visited Helsinki. In that city, the Ukrainian industrialists met with the heads of the Confederation of Finnish Industries, Timo Laukkanen and Petri Vuorio. It was concluded after the visit that shipments of wheat flour, vegetable oil, confectionery and bakery foods to Finland hold prospects.

According to ULIE Vice President, the head of the Center for Export Support Denis Krasnikov, the Finnish food market whose volume of imports is estimated at about EUR 4.3 billion, looks very promising for Ukrainian producers.

“I would like to commend the work of our Embassy in Finland, which cooperates closely with domestic manufacturers. Such work of the diplomatic service is very helpful in the promotion of Ukrainian companies’ goods onto foreign markets,” ULIE Vice President Denis Krasnikov said. “In addition, entrepreneurs expect that Ukrainian authorities will liberalize limitations on the forex market, which put our producers in a disadvantageous situation when entering other countries’ markets.”

The parties agreed to formulate specific proposals and present them at the business forum in Finland. Later, the proposals are expected to be introduced at the practical level, given that the Finnish business has long been working in Ukraine, having partnered with the ULIE, and is ready to cooperate.

The ULIE announced it would continue arranging meetings between Ukrainian producers and potential foreign partners. In particular, the ULIE says new meetings with representatives of the business circles of the United States, Canada, Mexico, Germany, Italy, Spain, the Netherlands, and Iceland are in the pipeline.