Business news from Ukraine

LVIV RAILWAYS TO BUY NEW DIESEL TRAIN MADE BY KCBW FOR UAH 109.8 MLN

KYIV. Sept 8 (Interfax-Ukraine) – The tender committee of Lviv Railways has held a meeting where to select the winner of a tender to buy a new passenger diesel train, and the winner was Kriukov Car Building Works (KCBW, Poltava region).

The press service of Lviv Railways reported that the price of the new diesel train is UAH 109.8 million (VAT included).

Lviv Railways said that two bids were submitted to the tender – from KCBW and Kharkiv Wagon-Building Plant LLC, and the price of the latter was UAH 120 million. The two bids met the tender criteria and were allowed to participate.

The suburban diesel train with three wagons made by KCBW is intended to carry passengers on non-electrified 1,520mm gauge rail sections with a speed of up to 140 km per hour. The diesel train has 291 seats, and two seats for passengers with disabilities.

Lviv Railways operates in the south-western part of Ukraine in six regions: Lviv, Ivano-Frankivsk, Zakarpattia, Chernivtsi, Vinnytsia, and Volyn.

The Kriukov plant, which is the CIS’s only manufacturer of both passenger carriages and freight wagons, manufactures freight wagons (open wagons, tankers, hopper wagons, and high-sided wagons), as well as passenger carriages, bogies for freight wagons, wheel pairs, and spare parts for subway carriages, escalators, containers, and road equipment.

ANTONOV ENTERPRISE STARTS PRODUCING FIRST PILOT MULTIPURPOSE AN-132 FOR SAUDI ARABIA

KYIV. Sept 8 (Interfax-Ukraine) – Antonov State Enterprise (Kyiv) has started manufacturing the first sample of its new multipurpose An-132 aircraft with a cargo capacity 9.2 tonnes under a contract signed with Saudi Arabia.

Antonov State Enterprise Acting President Mykhailo Hvozdev told reporters on Monday that the test aircraft of the new An-132 aircraft is being manufactured under the contract signed in April with Saudi Arabian KACST.

He said that at present, the company has finished the detailed design of the aircraft and has started manufacturing it.

“The first An-132 sample will be handed to the customer in late 2016,” he said.

Hvozdev said that the An-132 will have western engines, in particular, PW150A engines of Canada’s Pratt&Whitney, as well as aviation electronics and other equipment.

According to preliminary assessments, the internal need of the Saudi Arabian customer and its armed forces for the An-132 aircraft and its modifications is estimated at around 80 aircraft, he said.

SPF HOPES TO RECEIVE UAH 20-30 BLN FROM ‘BIG’ PRIVATIZATION

KYIV. Sept 8 (Interfax-Ukraine) – The State Property Fund of Ukraine (SPF) hopes to receive UAH 20-30 billion thanks to ‘big’ privatization, SPF Head Ihor Bilous said at a press conference in Kyiv on Monday.

“Budget revenue from big privatization should be at least UAH 20-30 billion. This would be a compensation element of the tax reform,” he said.

Bilous said that along with the state-owned facilities planned for the privatization which were named earlier, Sumykhimprom and Zaporizhia Titanium and Magnesium Plant could also be put up for sale.

“Sumykhimprom and Zaporizhia Titanium and Magnesium Plant would be included in the privatization [list] if the government does not decide on uniting assets in the titanium sector,” he said.

He added that the issue of uniting the assets is being actively discussed.

Bilous said that this year, the fund will focus on its preparations for the ‘big’ privatization. The preparations include the attraction of advisors. He said that negotiations with the European Commission, European Bank for Reconstruction and Development (EBRD), USAID and International Finance Corporation (IFC) on the financing of these advisors have been completed.

He said that USAID is ready to provide $5-7 million as a result.

Along with the preparation of large facilities for privatization, the fund plans to sell smaller companies this year and receive around UAH 1 billion. This mainly concerns combined heat and power plants.

“There are buyers for all combined heat and power plants, despite the fact that these are last century facilities… Not one, but five or six investors,” Bilous said.

EU TO PROVIDE EUR 55 MLN OF DONOR AID TO UKRAINE TO SUPPORT SME

KYIV. Sept 7 (Interfax-Ukraine) – The European Union would provide EUR 55 million of donor aid to support small and medium enterprises (SME).

The Economic Development and Trade Ministry of Ukraine said on its website that the agreement was signed by Economic Development and Trade Minister of Ukraine Aivaras Abromavicius and Director of IPA Strategy of Directorate General for Enlargement of the European Commission Gerhard Schumann-Hitzler.

The EU is to provide the funds under the programme EU Support to Ukraine to Re-launch the Economy (EU SURE). The funds will be used in 15 regions of Ukraine to create Business Support Centers, where SME will get consultations on the legal and market issues of doing business in Ukraine and abroad.

First, the centers would help starting business in agricultural, energy efficiency, ecology projects, the improvement of the quality of public services, infrastructure, and innovation technologies.

Deputy Economic Development and Trade Minister Yulia Klymenko said that one of the tasks of the Business Support Centers is to make the way of businessmen to Europe easier.

“If SME want to produce, trade and buy in the EU with profits, they are to use the advantages of DCFTA – the free trade zone between Ukraine and the EU. Center consultants would help them to do this,” she said.

The ministry said that the similar initiative that includes aid to Ukraine in developing SME are plans to the EU to provide EUR 40 million to finance the loan guarantee fund. Banks would receive an additional incentive to credit SMEs. The authors of the programme expect that with the effect of the financial tool of 7-8% SME would be able to receive loans of EUR 300 million. The EU aid would be sent to facilitate Ukraine’s participation in EU programmes Horizon 2020 and COSME (the EU programme for the Competitiveness of SMEs).

 

POROSHENKO ENACTS NSDC DECISION TO PROTECT UKRAINE’S AVIATION INTERESTS

KYIV. Sept 7 (Interfax-Ukraine) – Ukrainian President Petro Poroshenko has enacted a resolution by the National Security and Defense Council (NSDC), dated July 20, 2015, titled “On the measures to protect Ukraine’s national aviation interests.”

A decree to that effect, dated September 4, has been posted on the website of the head of state. The document is effective from the day of publication.

Control over the enforcement of the resolution has been vested with the NSDC secretary.

Under the NSDC resolution, the Cabinet is to urgently approve a plan of preparations for the introduction of Ukraine’s joint aviation space with the European Union and its member states, in particular, by adapting Ukraine’s air transportation laws to those of the EU.

The government also has one month to reorganize the State Aviation Service, to optimize state regulation of the use of the country’s airspace, to improve the functions of regulating air navigation services and organizing airspace, and the functions of certifying aviation businesses and aviation infrastructure; and to oversee (monitor) the civil aviation industry. In addition, the government is to consider increasing the number of state inspectors and improve pay conditions for them and for the persons authorized to conduct relevant inspections on the basis of audits carried out by the International Civil Aviation Organization.

The Cabinet also has two months to approve plans of measures to develop Ukrainian civil aviation before 2020, in particular, by developing domestic and international flights based on projected figures for passenger and cargo traffic; launching new flight routes; optimizing aviation schools and aviation medical centers with the aim of improving the quality of their services and raising the level of aviation safety; and by turning Boryspil International Airport into an international airline hub through measures such as simplifying border checks for Ukrainian nationals arriving in the country and for foreign passengers on transit flights.

The government is also to prepare a new government program on in civil aviation safety, based on international experience, and submit the bill to the Verkhovna Rada for approval; to develop, in accordance with EU laws, mechanisms for providing state support to domestic airline companies to make them more competitive in a liberalized market for air transportation services, and to protect national interests in the civil aviation industry.

 

IMC AGROHOLDING COULD EXPAND FIELD WITH WINTER WHEAT FOR 2016 HARVEST BY 28-60%

KYIV. Sept 7 (Interfax-Ukraine) – Industrial Milk Company (IMC) could expand its fields sown with winter wheat for the 2016 harvest to 16,000-20,000 hectares compared to 12,500 hectares for the 2015 harvest, depending on the weather.

“We plan to increase fields with winter crops. Last year we had 12,500 hectares, and this year from 16,000 to 20,000 hectares would be allocated for winter wheat, depending on weather,” IMC CEO Alex Lissitsa told reporters at a press conference in Kyiv last week.

He said that in general, the structure of fields for the 2016 harvest would not change, and that the core crop will be corn.

Lissitsa added that due to hot weather in 2015, Ukraine could harvest 20-22 million tonnes of corn.

“Ukraine would harvest 20-22 million tonnes of corn, which is around 20% down on what was planned. Western regions suffered from drought, these are Ivano-Frankivsk, Khmelnytsky and Ternopil regions, and there are problems with the north of Zhytomyr region. Good harvests are expected in Kharkiv, Poltava and Cherkasy regions,” he said.

IMC cultivates grains, oilseeds and potatoes. It is also one of the largest milk producers in Ukraine. The company owns storage capacity of 554,000 tonnes of grains and oilseeds. Its land bank is 136,700 hectares.