Business news from Ukraine

Business news from Ukraine

“Kyiv Metro” has signed contract with Avtostrada for construction of subway to Vynohradar for UAH 13.8 bln

Kyiv Metro has signed a contract to continue construction of the Syretsko-Pecherska subway line in the direction of the Vynohradar residential area, with Avtostrada Group LLC winning the tender.

According to the website of the Kyiv City State Administration, the construction period is set at 30 months and the cost of the works is UAH 13 billion 785 million. The procurement was conducted on the Prozorro public procurement platform.

“We are currently in the process of obtaining all the permits required by law and handing over the construction sites to the contractor. After that, construction work will begin,” the statement said.

The city administration emphasized that the construction of the subway will not only solve transportation problems, but will also provide residents of the Podil district with “round-the-clock reliable shelters.”

According to the Kyiv City State Administration, the right-hand tunnel has already been built, stretching almost 1,250 meters from Mostytska station to Syrets station. In addition, the construction of the main structures of the distillation ventilation unit has been completed. Also, the wall-in-soil method of enclosing structures and the metal structures for the pit have been partially installed. The main structures of the combined traction substation were constructed, and two-tier tunnels were partially constructed.

In December 2023, Kyiv Metro terminated the contract with Kyivmetrobud JSC in court due to the failure to meet the deadlines for construction work. The court is considering the recovery of a part of the prepayment, the use of which is not confirmed by the relevant acts of work performed, as well as penalties.

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Prices for construction and installation works in Ukraine in June increased by 8.4%

Prices for construction and installation works in Ukraine in June 2024 increased by 8.4% compared to June 2023, reported the State Statistics Service (Gosstat).

According to the State Statistics Service, in June 2024 to June 2023 prices increased in all segments of construction: in residential construction growth amounted to 8.9%, in non-residential – 9%, in engineering – 7.7%. Compared to May of this year, prices increased by 1%, 0.6% and 0.5% respectively.

At the end of the second quarter, prices for construction work rose by 8.1% year-on-year in April-June 2023, and at the end of the first half of the year – by 9.7% compared to the same period a year earlier.

As reported, in 2023, prices for construction works increased by 15.8% year-on-year.

The State Statistics Committee pointed out that the indicators are given without taking into account the temporarily occupied territories and part of the territories where there are (were) hostilities.

 

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“Avtostrada” wins tender for construction of metro to Vynohradar

Avtostrada Group of Companies has been recognized as the winner of the procurement procedure for the construction of the metro in Vynohradar, its founder Maxim Shkil said.
“We will start work without advances, at the expense of our own working capital. For us, the decision to enter the metro construction market is strategic, the company has been preparing for this for 3 years,” Shkil wrote on Facebook.
According to the public procurement platform Prozorro, the winner of the tender was determined on July 12 with a price of UAH 13 billion 785 million, which is slightly lower than the stated expected cost of the purchase of UAH 13 billion 956 million 843 thousand 711.13. The decision can be appealed until July 18.
The terms of the procurement stipulate the completion of construction (5th and 6th launch complex) of the Syretsko-Pecherska subway line to the Vynohradar residential area by December 30, 2026.
Shkil said that before the start of work, a detailed analysis of the status of work performed by previous contractors is required. Next, it is necessary to compare the actual amount of work performed and those that should be performed in accordance with the existing design solutions. After that, it is necessary to adjust the project in terms of the scope, type of work, and cost.
“For this purpose, Avtostrada has its own design institute with a separate underground construction unit, where employees have considerable experience in metro design. Accordingly, we will start this stage of work immediately,” said the founder of the group of companies.
In parallel with the documentary work, it is planned to start the construction of the metro to Vynohradar in the coming months.
He noted that there are difficulties with organizing the construction process at the highest possible pace, i.e. nine construction sites with round-the-clock operation.
“In today’s realities, it is impossible to ensure such an approach from the very first days, as the subway construction industry has been practically lost over the past ten years. From the very first days, Avtostrada will engage its employees, and in parallel, to reach the maximum construction schedule, we will recruit and train personnel, which will actually revive the metro construction industry,” said Shkil.
According to him, a significant factor that will affect the pace of construction is timely funding from the state for the work.
“We set ourselves the task of reaching the full pace of work around the clock in all construction sites in 2025, provided that we have adequate funding. In total, we plan to employ more than 4000 people. The total investment in this project will be more than $50 million. Next month, the company plans to contract the necessary equipment for the construction of the subway for more than $30 million. In addition, to avoid construction interruptions, we are counting on loans and our own working capital of up to UAH 1 billion. – These funds will be used in case the customer has a delay in financing. This will allow us to cover short cash gaps and continue to operate,” Shkil said.
As reported, on May 13, Kyiv Metro announced a tender for the continuation of the construction of the Syretsko-Pecherska line towards the Vynohradar residential area with a total cost of UAH 13,956 million.
In December 2023, Kyiv Metro terminated the contract with Kyivmetrobud JSC in court due to unsatisfactory terms of construction works performed by the contractor. The claim also seeks to recover a portion of the prepayment, the use of which was not confirmed by the relevant acts of completion. As of May 2024, the facility has constructed a right distillation tunnel with a length of almost 1,250 meters from Mostytska station to Syrets station, and completed the construction of the main structures of the distillation ventilation unit. Also, the wall-in-soil method of enclosing structures, monolithic and reinforced concrete support of the pit with metal structures – with excavation and removal of soil – were partially installed; the main structures of the combined traction substation were built; two-tier tunnels were partially constructed, etc.

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Chinese company may build plant in Turkey worth $1 bln

Turkish authorities are set to announce an agreement with Chinese automaker BYD Co. to build a $1 billion company facility in the country, Bloomberg reported.

According to the agency’s sources, Turkish President Recep Tayyip Erdogan will announce it on Monday at a ceremony in Manisa province, where the plant is planned to be built.

The opening of the plant in Turkey could make it easier for BYD, China’s largest electric car maker, to access the European Union market, with which the country has a customs agreement.

The day before, the European Commission imposed additional duties on imports of Chinese electric cars into the EU. For BYD Co. this duty amounts to 17.4%. Previously, the EU already had 10% duties on imports of electric cars from China.

The Turkish market is also of interest to BYD. Last year, cars with electric engines accounted for 7.5% of car sales in Turkey.

On Friday, it became known that the Turkish authorities refused to introduce an additional duty of 40% on imports of Chinese electric cars into the country, which was announced in June. This came after Erdogan’s talks with Chinese President Xi Jinping on the sidelines of the Shanghai Cooperation Organization (SCO) leaders’ meeting in Astana.

 

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“Ukrzaliznytsia” created “UZ Energo” for construction of gas-fired power plants

JSC “Ukrzaliznytsia” (UZ) has created a separate legal entity – “UZ Energo” LLC, which will be engaged in the construction of gas-fired power plants. construction gas-fired power plants with a total capacity of up to 250 MW in the regions, the company’s press service reported.

“A decision has been made to construction of dozens of gas-fired power plants with a total capacity of up to 250 MW. As of today, Ukrzaliznytsia is holding active negotiations with suppliers and international financial organizations for the rapid implementation of this project,” the press release quoted Yevgeniy Lyashchenko, head of the UZ board, as saying.

According to the press release, UZ Energo will be 100% owned by Ukrzaliznytsia through Sales Energy Ltd, which is also owned by UZ.

Lyashchenko reminded that UZ is among the top 5 largest distribution companies in Ukraine in terms of network length and volumes of electricity flow.

The report says that UZ, as one of the largest consumers of electricity in Ukraine, is experiencing a significant deficit in its supply on an equal footing with everyone else. The introduced limits for electricity consumption cover the real needs of the company only by 75%.

They pointed out that with the approach of the fall-winter period, the increasing deficit in electricity supply may affect the uninterrupted movement of trains and adversely affect the provision of public services for household consumers. “UZ” is also the operator of water supply distribution for a number of consumers.

According to the report, gas-fired power plants will first of all be installed in regional centers and connected to the company’s networks, from which are powered railway transport facilities, social sphere, as well as critical infrastructure facilities of other sectors of the economy.

 

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Volume of construction works in Ukraine in January-March jumped by almost 60 – statistics

The volume of completed construction works in Ukraine in January-March 2024 increased by 56.7% compared to the same period of 2023 – up to 35.5 billion UAH, according to the data of the State Statistics Service (Gosstat).

In March-2024, the index of construction products exceeded the index of March-2023 by 69.3%, and the previous month – by 92.3%, notes the State Statistics Service.

As reported by the State Statistics Service, in January-March 2024 to the same period of 2023, the growth in the volume of

construction was observed in all segments. Thus, in residential construction growth amounted to 39.2%, in non-residential – 49%, in engineering – 66%.

According to seasonally adjusted data of the department, the indexes of construction output in March-2024 in residential construction amounted to 55.9%, in non-residential construction – 105.5%, in engineering – 193.4%, and taking into account the effect of calendar days, the indicators are 52.1%, 82.6% and 148.6% respectively.

The proportion of new construction to the total volume of completed construction works in the first quarter amounted to 46.7%, repair – 25%, reconstruction and technical re-equipment – 28.3%.

The State Statistics Committee notes that the publication of data was postponed due to martial law. Statdata indicators are given without taking into account the temporarily occupied territory and the part of the territory where hostilities are (were) conducted.

 

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