Business news from Ukraine

STATE-OWNED UKRZALIZNYTSIA TO CREATE RAIL CAR COMPANY, TO ATTRACT LOAN FROM EBRD TO BUY 7,000 CARS

Public joint-stock company Ukrzaliznytsia plans to create a separate rail car company, which in 2018 and 2019 would buy 3,500 cars each year using a loan from the European Bank for Reconstruction and Development (EBRD), acting Board Chairman of Ukrzaliznytsia Yevhen Kravtsov said at the UZ: Investor Day 2018 conference in Odesa on Wednesday.
“This project will be implemented via the creation of a specialized rail car company, which would receive gondola cars bought for borrowed funds to its balance sheet.
According to a posting on the EBRD’s website, the project was pending approval of the bank’s board on May 23. The bank told Interfax-Ukraine that the consideration of the issue was postponed, and the new date will be announced later.
It is planned that the EBRD would provide a $150 million loan. The total cost of the project is $240.7 million. Some of the sum would be financed by Ukrzaliznytsia and thanks to grants under technical cooperation programs.
The bank said that it is planned to acquire around 6,500 gondola cars with the total need of the company of around 24,000 gondola cars.
Kravtsov said that if a separate company is created, the cars could be used on the market as a private fleet and earn more than the rolling stock of Ukrzaliznytsia.
“For us, these will be unprecedented conditions of work, when we are able to set real tariffs for transportation, which will allow us to talk about the payback of rolling stock and profit for investors. This project gives a signal to other potential investors to invest in Ukrzaliznytsia’s projects and show, how one can earn on them,” Kravtsov said.
He also added that to implement these projects, Ukrzaliznytsia is already negotiating with international companies that operate in the U.S. and European markets.

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UKRAINE EXPORTS 36.55 MLN TONNES OF GRAIN

Exports of grain from Ukraine since the beginning of the 2017/2018 agricultural year (July-June) and as of May 30 amounted to 36.552 million tonnes, which is 4.2 million tonnes less than on the same date a year earlier, the Ministry of Agrarian Policy and Food has said.
According to the report, in particular, wheat exports amounted to 16.18 million tonnes (485,000 tonnes less from the previous agri-year, exports of maize to 15.98 million tonnes (2.59 million tonnes less), barley to 4.19 million tonnes (1,070 tonnes less).
Rye exports totaled 35,000 tonnes (29,600 tonnes more) and exports of flour amounted to 392,800 tonnes (54,800 tonnes more).
As reported with reference to the ministry, Ukraine in the 2016/2017 agri-year exported 44.441 million tonnes of grain.

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HIGH-SPEED RAIL TRAFFIC TO 250 KM/H BETWEEN KYIV, ODESA AND LVIV WILL COST $16 BLN

PJSC Ukrzaliznytsia estimates the cost of implementing high-speed rail service of up to 250 km/h between Kyiv, Odesa and Lviv via Vinnytsia at $16 billion, the director for strategic development and investment policy at Ukrzaliznytsia, Anton Sabolevsky, has told Interfax-Ukraine. “Within the framework of the working group on the introduction of high-speed rail traffic, we estimated how much the construction of infrastructure for organization of high-speed communication between Kyiv, Odesa and Lviv via Vinnytsia could cost in principle. To build this infrastructure, about $16 billion is needed, taking into account the acquisition of appropriate rolling stock, its service centers and management,” he said.
At the same time, he noted Ukrzaliznytsia has not calculated the cost of high-speed communication between all the regional centers of Ukraine, since the implementation of such a project goes beyond the long-term planning and can be carried out exclusively in stages.
According to him, the work on implementing the infrastructure project for organization of high-speed rail service along the Kyiv-Kharkiv route could take at least ten years.

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ALFA INSURANCE INCREASES PREMIUM COLLECTION BY 26% IN Q1

Alfa Insurance (Kyiv) in January-March 2018 increased premium collection by 26%, to UAH 151.7 million, according to the website of the insurer. It is also noted that premiums for voluntary insurance of cargo and baggage increased by 80%, accident insurance by 67%, voluntary medical insurance by 56%. Alfa Insurance was founded in 2000. It specializes in risk types of insurance. It is represented in all regions of Ukraine. The charter capital of the company is UAH 103.48 million.

MINISTRY OF INFRASTRUCTURE WILL PROPOSE GOVERNMENT TO COMPENSATE INVESTMENTS IN SEAPORTS

The Ministry of Infrastructure of Ukraine in the near future might submit a draft resolution on compensation of investments in the port industry to the Cabinet of Ministers for consideration, Deputy Prime Minister Volodymyr Kistion has said. “We are talking about compensation of investments in the port industry of Ukraine, legalization of objects of port infrastructure that are not registered for objective reasons, both public and private,” he said at the Ukrainian Ports Forum 2018 in Odesa. In addition, the official expressed confidence that the ministry will soon complete the development of a new methodology for calculating port dues, as well as preparation of other legislative acts that will promote the development and modernization of seaports and will further provide opportunities to reduce port rates. At the same time, Kistion noted that since the beginning of the year the government has reduced port rates by 20%.

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