The European Bank for Reconstruction and Development (EBRD) will provide an additional EUR300 million loan to Ukrzaliznytsia (UZ) for the purchase of 80 modern electric freight locomotives, the UZ press service said on Wednesday.
The agreement, which the company announced in late May, was backed by a memorandum between Ukrzaliznytsia, the EBRD and the Ministry of Community Development, Territories and Infrastructure, which was signed in Berlin on the sidelines of the Ukraine Recovery Conference (URC2024).
“The issue of renewing the locomotive fleet for Ukrzaliznytsia is critical and crucial (…) Obtaining new and high-tech electric locomotives will significantly increase the efficiency of freight transportation,” said Yevhen Lyashchenko, chairman of the board of UZ.
At the end of May, the company announced the allocation of a $190 million grant from the United States through the World Bank Trust Fund as part of the Restoration of Critical Logistics Infrastructure and Network Connectivity (RELINC) project.
The proposal for the purchase of 80 electric locomotives with a total value of about $400 million has already been published on the EBRD tender portal. The tender requirements stipulate that the winner, in addition to supplying the locomotives, must create conditions for their maintenance and warranty repair in Ukraine.
Ukrzaliznytsia JSC (UZ) plans to purchase up to 80 modern powerful electric locomotives with funds from the European Bank for Reconstruction and Development (EBRD) and the World Bank’s RELINC project.
According to the company’s press service on Friday, the relevant tender was published on the EBRD portal. Applications will be accepted until July 22, 2024.
“According to the terms of the tender, the participants must submit two versions of the tender proposal – for the supply of 30 or 80 locomotives, depending on the availability of funding,” Ukrzaliznytsia said in a statement.
The expected total cost of the project is EUR400 million. Part of this amount – EUR 300 million – will be allocated by the EBRD under a guaranteed sovereign loan. In parallel, the project will be supported by an investment grant of $190 million from the US government, managed by the World Bank (WB) through the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF) under the WB-managed Restoration of Critical Logistics Infrastructure and Network Connectivity (RELINC) project.
“The tender requirements stipulate that the winner, in addition to supplying locomotives, must create conditions for the maintenance and warranty repair of new traction rolling stock in Ukraine,” Ukrzaliznytsia said.
The company called this an evolutionary step, noting that it is not only purchasing equipment but also changing its approach to its maintenance.
“It will also allow us to localize the capacities for maintenance and repair of locomotives in Ukraine as much as possible,” Ukrzaliznytsia emphasized.
Earlier it was reported that the Export-Import Bank of the United States approved a decision on loan financing for the renewal of the traction rolling stock fleet with 40 diesel locomotives manufactured by Wabtec. The bank is expected to provide financing in the amount of $156 million for a period of 15 years.
“Ukrzaliznytsia” plans pilot projects of inclusiveness of railway stations, starting with reconstruction of historical buildings in Kiev and Lviv, said the head of the project “Bezbar’ierna zaliznytsia” of JSC “Ukrzaliznytsia” Yarema Dul during the National Tourism Summit on Friday in Lviv.
“It is planned reconstruction of these stations, taking into account that these buildings are monuments of cultural heritage, raising the aprons, arrangement of elevators to them. Now the project documentation is being developed,” he told the agency “Interfax-Ukraine”.
According to the head of the project, these stations were chosen as pilot stations because they are leading in terms of passenger traffic served.
“The task is for the passenger to get into his carriage barrier-free. Today we have, for example, in Kiev, only the first platform is high,” he said.
At the same time, Yarema Dul added that part of the platform should remain low, so that it was possible to accept trains with low entrance.
In January-March 2024, Ukrzaliznytsia JSC (UZ) increased export transportation to ports by 2.4 times compared to the same period in 2023 – up to 15.347 million tons, while reducing the volume of transportation through land crossings in export traffic by 11.9% to 8.041 million tons, according to an analytical note of the company following the meeting of the Exporters’ Office.
In total, Ukrzaliznytsia transported 44.69 million tons of cargo in the first quarter of this year, which is 28.7% more than in the first quarter of 2023. Export transportation accounted for 52.3%, or 23.9 million tons, up 50.6% year-on-year.
In January-March, the company’s export transportation volume of iron and manganese ore increased 2.4 times year-on-year to 9.89 million tons, grain cargo – by 18.4% to 9.9 million tons, and ferrous metals – by 13% to 1.19 million tons.
In addition, the volume of vegetable oil transportation in export traffic in January-March increased by 7.5% to 424.2 thousand tons, construction materials – by 1.8 times to 545 thousand tons, cement – by 49.2% to 277.8 thousand tons.
Earlier, Oleksandr Kubrakov, Vice Prime Minister for the Reconstruction of Ukraine, Minister of Community Development, Territories and Infrastructure (Ministry of Reconstruction), said that in March 2024, Ukrzaliznytsia transported 16 million tons of cargo in all directions, which is a third more than in March 2023 and 10% more than the record figures for February 2024, when the volume of traffic reached 14.5 million tons.
In January-March 2024, Ukrzaliznytsia (UZ) operated at a profit, UZ CEO Yevhen Lyashchenko said at a meeting with journalists, but did not specify the specific amount of the profit.
According to the presentation made at the meeting, in 2023, UZ’s net profit amounted to UAH 5 billion.
Among the key factors that had a positive impact on UZ’s financial results, the presentation mentions revenue from passenger transportation, which increased due to an 11% increase in passenger turnover (+1.42 billion UAH) a decrease in the cost of materials and repairs due to cost-saving measures, including the use of old materials (+UAH 4.81 billion), a more stable hryvnia exchange rate than initially expected (+UAH 4.53 billion) and the restoration of the usefulness of assets in the de-occupied territories (+1.88 billion).
In addition, the cancellation of the land tax liability for facilities in the occupied territories (+UAH 0.69 billion), reduction of the land tax rate due to the re-registration of land plots (+UAH 0.55 billion), and growth in revenues from auxiliary activities: security services by 25% and passenger services by 24% (+UAH 527 million) had a positive impact.
At the same time, UZ’s financial performance was negatively affected by a decline in freight revenue in 2023 due to the temporary suspension of the grain corridor and conventional restrictions on agricultural exports to the EU (-UAH 8.57 billion), as well as a salary increase to avoid staff outflow (-UAH 3.41 billion).
According to Lyashchenko, UZ transferred 50% of its profit in 2023 to the state budget in the form of dividends.
The UZ CEO also noted that the company continues to restore infrastructure damaged by Russian attacks at its own expense. In addition, as one of the largest electricity distribution operators, it has invested in the protection of substations and critical energy infrastructure.
Ukrzaliznytsia (UZ) will not receive funding from the state budget in 2024; at the same time, in 2023, it decreased by 2.4 times compared to 2022, to UAH 4.179 billion, according to a presentation made by Yevhen Lyashchenko, chairman of the board of UZ, during a conversation with journalists.
In 2022, UAH 10.095 billion was allocated from the state budget for UZ. The funds were allocated for the uninterrupted operation of rail transport under martial law, as well as for emergency repair work at railway infrastructure facilities, repair of traction and rolling stock, and payment of wages, UZ said.
In addition, the funds allocated from the state budget financed the design and implementation of work to restore the European standard 1435 mm railway track from Chop station to Uzhhorod station with the extension to the platform of Uzhhorod railway station. UAH 6 million was allocated for these purposes. Almost UAH 83 million was used as a postpaid payment for a batch of passenger railcars delivered under the contract signed in 2021.
Of the UAH 4.179 billion received from the state budget in 2023, UAH 1.905 billion was an advance payment for passenger railcars under the 2023 supply contract, UAH 1.736 billion was a postpayment for passenger railcars under the 2021 supply contract, and UAH 538 million was used to finance infrastructure projects.
In addition, part of the funds was allocated for the reconstruction of facilities with electrification of the Vasylkiv – Vasylkiv II, Cherkasy – Taras Shevchenko section; reconstruction of facilities with electrification of the Vasylkiv – Vasylkiv II. Taras Shevchenko; reconstruction of the railway track on the section Goskordor – Mostyska II – Sknyliv (Lviv) with the construction of a new terminal at Sknyliv station; construction of a railway road bridge over the Dnipro in Kyiv (with approaches) on the railway section Kyiv-Moskovsky – Darnytsia.
