The fleet of electric locomotives of JSC Ukrzaliznytsia is five times larger than the fleet of diesel locomotives, which makes them critically important and necessitates the purchase of electric locomotives, said the company’s CEO Oleksandr Pertsovskyi in a comment to journalists in connection with the purchase of 55 electric locomotives from French manufacturer Alstom.
“The basis of Ukrainian logistics, Ukrainian railways, as well as European railways, is electric traction. It is more efficient, it accounts for 80% of our volume, it is five times more than their fleet, and there is a critical need in this segment,” Pertsovsky emphasized, according to an Interfax-Ukraine correspondent.
According to him, the ratio of electrified and non-electrified networks of Ukrainian Railways is “about 50-50,” but 80% of cargo and passenger traffic passes through electrified sections.
Pertsovsky clarified that the cost of electric traction transportation is 4-5 times lower.
“It is absolutely critical for us to have a reliable fleet of electric locomotives in order to transport our cargo economically,” the head of the UZ board concluded.
It is noted that at the beginning of the project, the possibility of purchasing diesel locomotives was considered, but the international community and Ukraine, as part of it, decided to adhere to the principles of the Paris Declaration, avoiding new capital investments with a high environmental impact.
The chairman of the board acknowledged that in the current conditions, when there are risks of power outages, diesel locomotives are relevant, but for this purpose, the company is urgently restoring the diesel locomotives that it inherited in large numbers.
Separately, Pertsovsky reported that a group of engineers and machinists visited Azerbaijan, where similar locomotives from the French concern Alstom are in operation, to familiarize themselves with their operation and technical features.
As reported, the French company Alstom and Ukraine’s Ukrzaliznytsia signed a contract to supply 55 electric locomotives to Ukraine worth EUR473 million in 2027-2029. The first electric locomotive will arrive in Ukraine in the first quarter of 2027. This will be followed by certification and the necessary tests.
Ukrzaliznytsia emphasized that 37% of the project’s funding is non-repayable grant aid of approximately EUR 173 million from the URTF fund managed by the World Bank, while the rest is a preferential long-term loan from the EBRD for EUR 300 million.
CEO of Ukrzaliznytsia JSC Oleksandr Kamyshin and CEO of Alstom Henri Poupart-Lafarge have signed a memorandum of understanding.
The signing took place at a press conference of Presidents of Ukraine and France Volodymyr Zelensky and Emmanuel Macron in Kyiv on Tuesday.
Earlier, at this press conference, Zelensky said that on February 8, Ukraine and France finalized the agreements and switched to the practical stage the implementation of the project on the supply of 130 ALSTOM locomotives worth EUR 900 million.
As reported, in May, Ukraine and France signed a framework intergovernmental agreement on financing the supply of 130 heavy-duty electric locomotives worth EUR 900 million for Ukrzaliznytsia by Alstom. The document was ratified by the Verkhovna Rada on July 1, 2021.
Alstom welcomed the ratification of the intergovernmental agreement and said that “the next important step is the signing of commercial agreements in the second half of 2021.” This will allow Alstom to start supplying locomotives to the Ukrainian market, which will also include 35% local content associated with the production and maintenance of electric locomotives.
Alstom is one of the world leaders (along with Siemens and Bombardier) in the production of power equipment and railway transport. It operates in more than 70 countries.
The French concern Alstom welcomes the ratification of an intergovernmental agreement between France and Ukraine on financing the supply of 130 heavy-duty electric locomotives for Ukrzaliznytsia, the company’s press service has said.
“The next important step is the signing of commercial agreements in the second half of 2021,” the company said.
According to the press release, this will allow Alstom to begin supplying locomotives to the Ukrainian market, which will also provide for 35% localization associated with the production and maintenance of electric locomotives.
As reported, Ukraine and France in May signed an intergovernmental agreement on financing the supply by Alstom of 130 heavy-duty electric locomotives for Ukrzaliznytsia for up to EUR 900 million.
This agreement was ratified by the Verkhovna Rada of Ukraine on July 1, 2021.
Alstom is one of the world leaders (along with Siemens and Bombardier) in the production of power equipment and railway transport. It operates in more than 70 countries and employs about 70,000 people.
The launch of a project for the supply of electric locomotives to Ukraine can create more than 7,000 jobs in the country in the long term, the French concern Alstom has said.
“The creation of new jobs will be one of the main positive consequences of the contract, which will be signed in the near future. According to our estimates, more than 7,000 jobs will be created or retained in Ukraine thanks to the electric locomotive business in the long term,” the company told Interfax -Ukraine.
Asked about the delivery times and conditions of locomotive maintenance, Alstom said that this issue is currently being resolved with customers and cannot yet be brought up for discussion.
According to representatives of Alstom, the company is looking for local clients in Ukraine, including among private businesses.
The French concern Alstom is ready to increase the level of localization in the contract for the supply of electric locomotives to Ukraine, French Finance and Economy Minister Bruno Le Maire has said. “For example, with regard to the contract for the supply of electric locomotives, Alstom is ready to localize up to 35% of production and service in Ukraine. At the beginning of the discussion, Alstom planned to localize about 20% of production in Ukraine. We realized that this was not enough. This is a vivid evidence of our readiness to take into account the legitimate request of the Ukrainian authorities,” Le Maire said in an exclusive interview with Interfax-Ukraine.
He said that France fully understands the request of the President of Ukraine Volodymyr Zelensky, who wants French companies involved in contracts with Ukraine to locate a significant part of their production in Ukraine.
“This is a perfectly legal requirement, and we acted accordingly,” Le Maire said.
The Minister said that France has a long history with Ukraine, and he is determined to open a new chapter of this long journey from an economic point of view.
“There is a significant network of French companies in Ukraine: now there are 160 French companies in the country, employing 30,000 people. This makes French companies the leading international employers in Ukraine. We also want to strengthen our ties in very specific sectors: utilities with distribution of drinking water, energy, infrastructure and transport such as trains, healthcare and, of course, agriculture. In all these sectors, I think there are opportunities for deepening and expanding relations,” Le Maire said.
Ukraine and France may soon sign an intergovernmental agreement on cooperation with ALSTOM for the implementation of a project for the supply of electric locomotives to a company with partial localization of their production and maintenance in Ukraine.
This was announced by Interior Minister Arsen Avakov, who is the head of the the Ukrainian-French Intergovernmental Commission on Economic Cooperation, during negotiations with Ambassador Extraordinary and Plenipotentiary of France to Ukraine Etienne de Ponsen and head of Ukrzaliznytsia JSC Volodymyr Zhmak on Friday, the website of the Ministry of Internal Affairs said.
“We have been working on the details of a common project with the French side for a long time and in the near future we can reach the signing of an intergovernmental agreement that will fully meet the needs of Ukraine,” the press service quoted Avakov as saying.
Zhmak, in his turn, said during the negotiations that Ukrzaliznytsia has a very old park and it needs to be strategically updated. At this stage, according to him, Ukrzaliznytsia is interested in 50 two-system electric locomotives capable of transporting from 5,500 to 6,000 tonnes of cargo.
“We need these locomotives with a long-term system of maintenance and localization of production in Ukraine. At the second stage, we are interested in getting single-system locomotives,” he said.
CEO of ALSTOM Henri Poupart-Lafarge assured that it could be a reliable and long-term partner for Ukrzaliznytsia and Ukraine.
“We have been working in the market for many years and we can satisfy the needs of Ukrzaliznytsia. ALSTOM has experience in working in markets with the localization of production and service capacities. This strengthens our cooperation and creates new jobs. In particular, we work in this way in Kazakhstan and South Africa,” he said.
The ministry also notes that this project was founded in September 2018, when ALSTOM and Ukrzaliznytsya signed a memorandum of understanding, which formalizes cooperation in the provision and maintenance of electric locomotives. The financial model of the project involves the attraction of credit funds from the French State Treasury and other sources.
As reported, President of Ukraine Volodymyr Zelensky on October 27 met with CEO of ALSTOM Henri Poupart-Lafarge and discussed with him the prospects for the implementation of joint projects in the railway sector.
The French machine building company ALSTOM is one of the world leaders in the production of power equipment and railway transport.
