Business news from Ukraine

“Ukrzaliznytsya” with USAID support will finalize design of construction of a euro track from Polish state border to Lviv

Ukrzaliznytsia JSC (UZ) with support from the U.S. Agency for International Development (USAID) will develop a feasibility study (FS) of the euro track project that will connect Mostyska station on the Polish border to Sknylyv (a settlement in the suburbs of Lviv), the Ministry of Community Development, Territories and Infrastructure (MCDI) said on Friday.

The corresponding memorandum was signed by Deputy Prime Minister for Restoration Oleksandr Kubrakov, U.S. Ambassador Bridget Brink, from UZ – head of the board Eugene Lyashchenko and board member Vyacheslav Eremin.

It is indicated that further development of the 1435 mm wide section of the track will include its connection to Uzhgorod, Kovel, Chernivtsi, and at a later stage to Kiev and eastern Ukraine.

“The track will be used not only for freight, but also for passenger transportation in the direction of EU countries,” Kubrakov said.

He stressed that one of the important tasks to increase export capacity is to modernize and replace the tracks, and if necessary, to build new ones.

“The signing of the Memorandum with USAID will have a tangible impact on the recovery of the Ukrainian economy and contribute to the European integration processes in general,” the Deputy Prime Minister said.

Earlier, the head of the UZ board, Yevhen Lyashchenko, told the Interfax-Ukraine news agency that the design of the construction of the Euroway from the state border with Poland to Sknyliv will be completed by the end of this year. According to him, the implementation of this project will make it possible to organize communication by euro track from Lviv to Krakow, Prague and Vienna.

As reported, the construction of euro track in the direction Mostyska-Sknyliw was planned to begin in 2020. Also in 2020 the government included this project in the list of priority investment projects until 2023.

The railway station Sknyliw is located in Lviv at a distance of 5.5 km from the Lviv station, 3 km from Lviv airport and 1 km from the bus station.

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Financial plan of Ukrzaliznytsia for 2024 approved with loss of UAH 12.6 bln

The financial plan of JSC “Ukrzaliznytsia” (UZ) for 2024 was approved with a projected loss of 12.6 billion UAH, which will be covered by the implementation of the plan to break-even, the press service of UZ reported on the official website of the company on Monday.

“The Cabinet of Ministers approved the financial plan of JSC “Ukrzaliznytsia” for 2024. Thus, planned income in the amount of 103.2 billion UAH, in particular, net income from the sale of products (goods, works, services) in the amount of 98.6 billion UAH”, – said in the message of UZ.

It is indicated that the company’s EBITDA is planned at the level of UAH 11.8 billion. EBITDA profitability index will amount to 12%.

The costs of UZ in 2024 will amount to 115.8 billion UAH. In particular, it is envisaged that the cost of sales will increase by 13%, mainly due to the need to increase employee salaries and electricity tariffs.

Revenue from freight transportation is expected to amount to UAH 80.1 billion, from passenger transportation – UAH 9.3 billion.

The planned volume of payments to the State and local budgets – 24 billion UAH, which is 5% more than in 2023.

“For the third year in a row we approve the main financial document of the company even before the new year. This time also in a record time”, – are quoted in the message the words of the head of the Board of UZ Eugene Lyashchenko.

He stressed that the approved financial plan does not provide for the attraction of funds from the state budget, the priority of which is the financing of the country’s defense capability.

“Our task remains stable provision of passenger and freight transportation in wartime conditions and financing of necessary investments for support and restoration of railway infrastructure at the expense of own and attracted from international financial institutions funds. In addition, the financial plan provides for an increase in salaries of railway workers”, – said Lyashchenko, noting that the current salaries of UZ employees do not correspond to their real contribution to the defense capability and economy of Ukraine.

The head of UZ pointed out that work on the financial plan was started back in the third quarter, when the work of ports was completely blocked.

“We have already developed our proposals for reaching break-even. In particular, given the trend of the last two months of this year, we have made a more optimistic forecast for cargo transportation. Also, we plan to unify tariffs: make them more transparent and bring them to the European model. We continue to work on cost optimization,” – said Lyashchenko.

UZ said that the financial plan for 2024 forecasts losses at the level of 12.6 billion hryvnias. They will be covered by the developed plan to reach break-even.

In addition, it is planned to utilize capital investments in the amount of UAH 38 billion. In particular, these funds will be used to restore the infrastructure damaged by the enemy and develop crossings with EU countries.