Business news from Ukraine

Business news from Ukraine

EU is interested in extending European gauge railway to Kyiv and Odesa

The European Union is interested in expanding the European railway network to Lviv, Kyiv, and Odesa while ensuring transport safety, said Magda Kopczyńska, Director-General of the European Commission’s Directorate-General for Mobility and Transport.

“In the medium term, I would like to see several European-gauge rail corridors running unimpeded from Poland all the way to Kyiv, from Prague to the southern route via Uzhhorod, and then all the way to Kyiv and Odesa,“ she said at the ”Ukraine-EU“ business summit in Brussels on Wednesday, according to a correspondent for the ”Interfax-Ukraine” agency.

Kopchynska noted that Ukraine has already very quickly built 22 km of European-gauge track from Chop to Uzhhorod, and the EU has allocated funds to Ukraine to begin construction of the line that will run to Lviv.

The European Commission representative emphasized that when planning new financial programs, the EU is increasingly encountering the principle of “dual use” of infrastructure—taking into account issues of proper functioning and safety of transport infrastructure.

“Now, based on Ukraine’s terrible experience, member states are much more aware that it is not enough to simply build something. We also need to make sure we know how to protect it,” she emphasized.

Kopchynska noted that over the past 10 years, there has been a growing recognition of the need to extend transport corridors beyond the EU’s borders, which has become the basis for expanding the Trans-European Transport Network (TEN-T) beyond 2022 to include Ukraine, specifically Odesa.

“We tried to convince member states 10 years ago that it might be a good idea for these corridors, which are located within the EU, to extend beyond the EU’s borders. This didn’t work until February 2022,” Kopchynska stated.

She drew particular attention to the role of the so-called “Solidarity Lanes,” which the EU introduced after the start of the full-scale war, when the operation of Ukrainian Black Sea ports was effectively blocked. According to her, these routes have proven their effectiveness and remain important for Ukraine and the world even after the reopening of Black Sea shipping.

“I think the situation is improving somewhat, but if you ask me whether everything is perfect and running smoothly, that’s not the case,” Kopchynska said, calling for the further development of the “Solidarity Lanes.”

In her view, the construction of border crossing infrastructure should be considered in a way that ensures maximum simplification, given that Ukraine is still not part of the Schengen Area.

Kopchynska emphasized that it is also necessary to develop inland waterways and operational seaports in the Black Sea.

“And yes, once airspace is open, we will also need developed airports in Ukraine,” added the Director-General of the Directorate for Mobility and Transport.

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Ukrzaliznytsia wants to attract EU grants for construction of 80 km of European gauge railway to Lviv

Ukrzaliznytsia (UZ), subject to European and state co-financing, plans to implement the Mostytska-Sknyliv project in the next two years and further develop the Lviv-Uzhhorod -Chop and Lviv-Chernivtsi-Vadul-Siret (Romania), which will allow Ukraine to begin restoring and realizing its unique geographical status, said Oleg Yakovenko, director of the strategy and transformation department at Ukrzaliznytsia.

“We also plan to obtain grant funds for the Mostyska-Sknyliv project, which will connect 80 km of European gauge track between the Polish border and Lviv. Next, we are currently conducting technical and economic studies on the corridors connecting Lviv, Chernivtsi, and Romania,” Yakovenko said during the Kyiv International Economic Forum (KIEF) on Thursday, October 16.

According to him, as part of Ukraine’s integration into the European Union, UZ plans to develop 1435 mm gauge railways and European transport corridors on the territory of Ukraine. The European integration reform of the railway industry also envisages a radical change in the functioning of the entire railway model in Ukraine.

“First of all, we are talking about market reform, which involves separating the infrastructure operator within Ukrzaliznytsia from the transport operators. This will allow us to liberalize the market in the future. It will also allow us to create market mechanisms specifically for transport,” Yakovenko explained.

He named the introduction of European rules on technical compatibility and interoperability as another element of the reform. This concerns technical safety standards, as well as changes to the safety management system.

The director of the strategy and transformation department at Ukrzaliznytsia noted that a draft law “On the safety and interoperability of Ukraine’s rail transport” is currently planned to be submitted for adoption by the end of the year, while next year the company expects a law on market liberalization to be introduced.

As Yakovenko explained, it is expected that a so-called infrastructure access tariff will be formed, according to which market participants will be able to purchase certain access to transport routes from the infrastructure operator on a competitive basis.

“These tariffs will be regulated, i.e., they will be formed in accordance with the tariff formation procedure and will reflect economically justified tariffs in accordance with European rules,” emphasized the representative of Ukrzaliznytsia.

It is noted that the new system will introduce separate PSO (Public Service Obligation) contracts between passenger carriers and the state at the national level, as well as between carriers and local authorities. This should remove the financial burden from freight transport.

As reported, in September, a section of standard (“European”) 1435 mm gauge railway was opened between Uzhhorod and Chop in Zakarpattia Oblast, which will allow for direct rail connections between Uzhhorod and a number of European capitals.

In addition, in January 2025, it was reported that the reconstruction of the railway track on the section “Polish State Border – Mostyska II – Sknyliv (Lviv)” would be postponed until 2026, although in February 2024, the then Deputy Prime Minister for Recovery – Minister of Community, Territory and Infrastructure Development Oleksandr Kubrakov announced the start of construction by the end of 2024. Later it became known that Ukraine had failed to attract Connecting Europe Facility (CEF) funding for the project. It was reported that the US Agency for International Development (USAID) was considering financing 50% of the project’s cost, but it has since been liquidated.

 

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Chernivtsi is preparing to enter European gauge: construction will start in 2026

The construction of the Chernivtsi-Suchava (Romania) European railway will begin in 2026, and a feasibility study is being prepared, Deputy Finance Minister Oleksandr Kava said.

“Under an optimistic scenario, construction of the European railway to the city of Chernivtsi (from Suceava, Romania – IF-U) may already begin next year… A feasibility study is currently being prepared for the project. Chernivtsi has the opportunity to become the second regional center after Uzhhorod to get access to the European gauge directly in the city,” Kava said at the conference ‘Logistics as a Driver of Economic Growth’ organized by the We Build Ukraine think tank.

According to him, the construction of the Chop-Uzhhorod European railway is currently underway, funded 50% by Connecting Europe Facilities (CEF) and 50% by the state budget.

The launch of this Euro-gauge is planned for the summer of 2025, Kava said.

“This (Chop-Uzhhorod European railway – IF-U) will not only allow to launch direct passenger trains from Uzhhorod to Budapest, Bratislava, Prague, Vienna, Dresden, but will also enable shippers operating in Uzhhorod to send goods via the European railway to partners in Europe and also receive goods, containers and materials from European countries directly to Uzhhorod,” the deputy minister said.

Earlier it was reported that Ukrzaliznytsia JSC (UZ) made temporary changes to the schedule of a number of passenger trains heading to Uzhhorod until the end of July due to large-scale work on laying a European standard track between Chop and Uzhhorod.

At a meeting with European Commissioner for Sustainable Transport and Tourism Apostolos Tsitsikostas, Vice Prime Minister for Reconstruction of Ukraine and Minister of Community and Territorial Development Oleksiy Kuleba said that direct European gauge rail service to Uzhhorod would be launched in the second half of 2025.

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