Business news from Ukraine


The Cabinet of Ministers of Ukraine has temporarily appointed board member Željko Marček acting board chairman of JSC Ukrzaliznytsia (Kyiv).
Government decree No. 65-r dated February 5, 2020 has been posted on its website.
Earlier the government approved the dismissal of Ukrzaliznytsia Board Chairman Yevhen Kravtsov without transferring him to a new position.



JSC Ukrzaliznytsia, the German national railway operator Deutsche Bahn AG and DB Engineering & Consulting GmbH (DB E&C) have signed a memorandum of understanding regarding strategic partnership for the development of Ukrzaliznytsia.
The document was signed in Kyiv on February 5 with the participation of Prime Minister of Ukraine Oleksiy Honcharuk and member of the board for infrastructure at Deutsche Bahn AG Ronald Pofalla, an Interfax-Ukraine correspondent reported.
“We emphasized that within the framework of our cooperation, we will primarily focus on consulting… And we are confident that our cooperation will be successful,” Pofalla said when signing the document.
According to the text of the memorandum, “the parties agreed to study and develop a concept and a plan in order to provide DB E&C with the opportunity of providing the critical managerial and technical assistance to Ukrzaliznytsia (except for issues related to military transportation).”
The memo does not contain the final conditions and all issues on which agreement should be reached between the companies for the purpose of strategic cooperation.
Moreover, according to the document, neither party is liable for any direct, indirect or consequence losses (loss of profit, inability to use or loss of business opportunities).
The memorandum is concluded for a period of three years. The estimated period of strategic cooperation is up to ten years.
“At the first stage, we are talking about cooperation in the consultation field. But we hope that over time we will come to deeper forms of cooperation… I hope this will be the next step in building reliable cooperation between Ukrzaliznytsia and Deutsche Bahn,” Honcharuk said.
In turn, the representative of Deutsche Bahn said that the German company went through the path of privatization, which allowed it to become a successful carrier.
On the part of Ukrzaliznytsia, the memorandum was signed by board members Željko Marček and Remigiusz Paszkiewicz, on the part of Deutsche Bahn – Pofalla, on the part of DB E&C – Chairman Niko Warbanoff.
Commenting on the difference between the memorandums – signed in Davos and the current one, Minister of Infrastructure Vladyslav Krykliy said that today’s document implies more specific options for interaction between the companies.



JSC Ukrzaliznytsia (Kyiv) is considering the possibility of repairing 300-500 passenger cars in 2020 if the developed model of repairs is supported by the government, the company’s press service has reported, with reference to company head Yevhen Kravtsov.
“Ukrzaliznytsia has invented a model according to which in 2020 overhauls of up to 500 passenger cars could be carried out … According to experts, under the formula one car can be updated for UAH 1 million. For comparison: a completely new wagon costs UAH 25 million today, overhauls cost UAH 11-12 million,” the company said.
According to Kravtsov, the company receives most complaints about the quality of passenger cars because of old windows, worn toilets and heating systems.
“We found a model of how to make overhauls on these items with minimal resources. This is replacing windows with new double-glazed windows, replacing toilets and heating,” Kravtsov said.
He said that the possibility of repairing 300-500 cars is foreseen for 2020.
“If we can maintain such a pace, then in about three years we will forget about the problem of cars in the economy segment. I hope this initiative is supported at the government level, and we can start this program,” the head of Ukrzaliznytsia said.
As reported, Ukrzaliznytsia expects profit at the level of UAH 2.5-3 billion over 2019.
In 2018, Ukrzaliznytsia saw net profit rise by 78% compared to 2017, to UAH 203.9 million



Ukrainian authorities want to pass JSC Ukrzaliznytsia to management of Deutsche Bahn AG (DB), Germany’s operator of railways, for 10 years, Ukrainian Prime Minister Oleksiy Honcharuk has said. “Yes, we want to pass our railways to the Germans to manage it for 10 years,” Honcharuk said at the Ukrainian Breakfast in Davos, Switzerland on Thursday morning.
He added that the authorities of Ukraine associate not only expectations about the development of Ukrzaliznytsia with this decision. “This is ecosystem-based issue, which should show that Ukraine is unprecedentedly open for investment, for the world, for new standards,” the prime minister said.
Honcharuk said that, despite the fact that it is still necessary to negotiate and agree on the details of the decision and documents, “a political decision on this has already been taken and this is a huge step.”
Later, at a briefing on the sidelines of the Ukrainian Breakfast, the prime minister said that the relevant agreement with DB will be “early February.”
As reported, on January 22, 2020, the Ministry of Infrastructure of Ukraine and Deutsche Bahn in Davos, Switzerland, signed a memorandum of understanding on strategic partnership in the industry and the development of Ukrzaliznytsia.
“This memorandum is not yet about privatization, and not about concession, but about strategic partnership. That’s great news,” Honcharuk said, when opening a meeting of the National Investment Council under the president of Ukraine in Davos.
He said that the country needs such assistance to improve the situation on the country’s railway and realize its logistics potential.
At the same time, speaking about the memorandum, in his Twitter account, Honcharuk said that German specialists will reform the management mechanisms of Ukrzaliznytsia, and Ukraine will retain full control over the enterprise.
“I hope that German operational efficiency and zero tolerance for corruption will become the basis for changing the situation in Ukrzaliznytsia,” the prime minister wrote.
According to the text of the memorandum, the parties will study the possibilities of creating a strategic partnership between Ukrzaliznytsia and DB.



JSC Ukrzaliznytsia (Kyiv) during the current winter holidays transported more than 3.3 million passengers in long-distance and high-speed trains, which is 6.5% more than last year (3.1 million).
According to the company’s press service, Ukrzaliznytsia put on 49 additional passenger trains for this period, which carried out 403 trips. These trains transported 474,000 passengers.
In addition, 2.2 million people were transported by year-round trains, 336,000 by high-speed trains, and 263,000 by regional trains.



Representatives of Germany’s Deutsche Bahn railway concern jointly with the Ukrainian government and JSC Ukrzaliznytsia are working on strategic partnership, the Center for Transport Strategies reported last week, referring to Deputy Director of the Center for Eastern European Studies in Berlin, ex-member of Bundestag Dmitry Stratievsky.
According to him, representatives of the German concern plan to visit Kyiv in the coming days.
“The alliance with Deutsche Bahn is interesting for Ukraine, first of all, with technologies and investments in updating the infrastructure. Undoubtedly, the leaders of the German market have something to share with their Ukrainian colleagues. Deutsche Bank and E.ON plan to join this process,” Stratievsky said.