Business news from Ukraine

STATE-RUN UKRZALIZNYTSIA HAS NO PLAN TO RAISE TICKET PRICES FOR PASSENGERS

JSC Ukrzaliznytsia in 2022 does not plan to raise prices in passenger traffic.
“So far, there are no such decisions. We have indexed very smoothly this year. Not all at once, but in relation to the consumer price index and stretching for the whole year. On the contrary, we plan to stimulate individual services with promotional rates. For example, with tour operators, we are talking about how to support the transportation of large groups by rail by setting discounts on bulk reservations depending on the size of the group,” Oleksandr Pertsovsky, the director of the Passenger Company branch, said in an interview with Interfax-Ukraine.
He also noted that in the medium term, Ukrzaliznytsia plans to initiate a revision of tariff regulation in order to enter a more flexible pricing policy in the passenger segment.
“What I mean: a common practice among transport operators is that the earlier you buy tickets, the cheaper they are, and if at the last minute – the more expensive. to the price. This will allow us to increase the average profitability while still giving the best price to the individual passengers who are most price sensitive. As an option, make a greater distinction between classes. We are also working on the possibility of changing pricing in relation to distances,” he explained.
According to him, all this requires both certain regulatory changes and programmatic changes in terms of restructuring the current IT system of Ukrzaliznytsia.
The director of the Passenger Company branch also noted that in comparison with 2020, in 2021 Ukrzaliznytsia showed good dynamics in terms of covering expenses with income in the segment of passenger transportation.
To further improve the situation, the company is working on the introduction of contracts for socially significant transportation, since for many years the company had “a huge percentage of underfunding” from the local authorities.
“Plus, we are actively working on the issue of control over fares. In the suburbs, for example, we are piloting an IT system that allows you to sell tickets online or through kiosks, both single and subscriber for passengers. We are also reviewing the configuration of the turnstile system to reduce the percentage of free riders,” Pertsovsky said.
He also stressed that the idea of bringing passenger traffic to the level of prime cost is impossible within the framework of the current market model and does not make sense.

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STATE-RUN UKRZALIZNYTSIA LAUNCHES CONTAINER TRAIN TO CHINA

JSC Ukrzaliznytsia has launched the first container train with export cargo on the route Ukraine – China. As Interfax-Ukraine was informed at the Ministry of Infrastructure of Ukraine on Tuesday, the train departed from the Liski container terminal in Kyiv.
The train consisted of 43 40-foot containers with lumber.
Following to Xian, the train will cover almost 10,000 km across the territory of four countries. Estimated travel time is about 18 days.
“In the middle of September, we received the 50th container train with imported cargo from China. Today, we are sending the first container train with Ukrainian cargo to China. We plan that these trains will become regular,” Board Chairman of Ukrzaliznytsia Oleksandr Kamyshin said.
According to him, the optimal transport for the development of trade relations between Ukraine and China is rail container transportation.
The Ukrzaliznytsia’s branch Liski provides a range of services in the field of organizing railway and intermodal transportation of transit and export-import cargoes in containers. The terminal allows for complex forwarding services for customers’ cargo with door-to-door delivery of cargo through the territory of the CIS, Baltic countries and Europe.
The center has container terminals in Kyiv, Kharkiv, Dnipro, Odesa and a transshipment complex in Chop.

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STATE-RUN UKRZALIZNYTSIA LOSES ONE THIRD OF FIXED ASSETS

The Temporary Investigative Commission of the Verkhovna Rada, created to check and assess the state of JSC Ukrzaliznytsia, found that by now the company has lost one third of its fixed assets.
“We state that the management of Ukrzaliznytsia does not protect or develop property and fixed assets entrusted to it by the state. The audit established the loss of one third of fixed assets. During the five years we studied, Ukrzaliznytsia fulfilled the capital investment plan by only 65%. Almost UAH 30 billion has not been disbursed in this direction. As a result, the railway infrastructure is in critical condition,” Head of the Temporary Investigative Commission Yulia Hryshyna said during the presentation of the report to the Verkhovna Rada.
Another reason for the problems, she said, is the significant influence of oligarchic groups that regularly underpaid the company, including for freight rates. As Hryshyna said, this has deprived Ukrzaliznytsia of UAH 100 billion over the past five years.
“The state in which Ukrzaliznytsia ended up for now no longer allows it to fully perform the tasks of transporting goods and passengers,” she said.

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STATE-RUN UKRZALIZNYTSIA MAY ANNOUNCE OPEN INTERNATIONAL TENDER FOR PURCHASE OF TRAINS

JSC Ukrzaliznytsia plans to announce an open international tender for the purchase of rolling stock for the City Express project at the end of September, acting chairman of the board Oleksandr Kamyshin said.
“In February, the president [Volodymyr Zelensky] announced the City Express project in Kyiv, Dnipro and Kharkiv. Ukrzaliznytsia has intensified work in this direction. Today we are designing stations, completing a feasibility study of the project and terms of reference for the purchase of rolling stock for the Kyiv hub. In the near future we will send terms of reference for all Ukrainian and international potential participants in the purchase of rolling stock. At the end of September, we plan to announce an open international tender, where we will be glad to see both Stadler and other ready-made suppliers of rolling stock,” he said during the presentation of a five-car electric train Stadler Flirt of the Swiss company Stadler.
Kamyshin said that Stadler Flirt has been tested in Ukraine for a week.
“It is important for us to understand how good the technical and service indicators of this train are. We will be testing it for several more weeks. I think Ukrainians deserve a train of this level,” he said.
According to Stadler Rail Group CEO Peter Spuhler, the company has already sold about 2,000 units of Stadler Flirt.
Stadler Flirt is a family of passenger electric and diesel trains manufactured by the Swiss company Stadler Rail AG. FLIRT is an abbreviation (Flinker Leichter Innovativer Regional-Triebzug – German, translated as a high-speed light innovative regional train). The first train was designed and delivered in 2004. The maximum train speed is 160-200 km/h.

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UKRAINIAN STATE-RUN UKRZALIZNYTSIA TO ENHANCE PASSENGER TRANSPORTATION MANAGEMENT WITH DEUTSCHE BAHN TEAM

JSC Ukrzaliznytsia and Deutsche Bahn Engineering & Consulting have entered into an agreement on consulting in the field of passenger transportation, according to a posting on the Facebook page of the Ministry of Infrastructure of Ukraine.
This is about improving the planning and development of passenger rail transport, optimizing purchases and renewing rolling stock.
Deutsche Bahn will help Ukrzaliznytsia to separate passenger from freight traffic and ensure efficient management. Consulting is the first stage of cooperation, which will be implemented by the end of 2021. After its successful implementation at the second stage, Ukrzaliznytsia will engage a team of Deutsche Bahn managers to directly manage passenger traffic in 2022.
“Transfer of Ukrzaliznytsia to the management of passenger transportation by DB Consulting is the first systematic step towards a complete transformation of railway transportation in Ukraine,” Minister of Infrastructure of Ukraine Oleksandr Kubrakov said.
According to him, with this project the state begins Big Construction project at Ukrzaliznytsia, which will impact the entire infrastructure, rolling stock fleet and service.
“The agreement signed today is the first stage of cooperation, and we expect that, based on its results, we will move on to the next stage already at the beginning of 2022, when the team of German managers will be delegated for the operational management of passenger traffic in Ukraine,” the Ministry of Infrastructure said, citing Member of the Management Board for Infrastructure at Deutsche Bahn AG Ronald Pofalla.
According to acting Board Chairman of JSC Ukrzaliznytsia Oleksandr Kamyshin, DB E&C is to develop a roadmap for the implementation of long-distance and suburban passenger transportation for the next five years and a model for financing passenger transportation.
“In the process of reforming the industry, we must change the long-standing practice of passenger transportation being financed by freight. These are separate areas of our company’s business, and they must be accounted for and financed separately. Therefore, we expect our consultant to develop an effective financial model for passenger transportation,” Kamyshin said.
In addition, DB E&C experts should determine the traffic volumes and the estimated capital investment needs of Ukrzaliznytsia to renew the rolling stock for use in Public Service Obligations (PSO) model.
The service provider will also provide an assessment of the prospects for the purchase and production of passenger rolling stock – regional electric trains, diesel trains, night train cars – and the possibility of producing such rolling stock within the framework of international cooperation with the participation of a Ukrainian manufacturer.
As reported, in August, Ukrzaliznytsia and DB Engineering & Consulting began cooperation to develop a new energy efficiency strategy for the company.

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ALSTOM EXPECTS SIGNING COMMERCIAL AGREEMENTS FOR SUPPLY OF ELECTRIC LOCOMOTIVES TO UKRAINE IN H2 2021

The French concern Alstom welcomes the ratification of an intergovernmental agreement between France and Ukraine on financing the supply of 130 heavy-duty electric locomotives for Ukrzaliznytsia, the company’s press service has said.
“The next important step is the signing of commercial agreements in the second half of 2021,” the company said.
According to the press release, this will allow Alstom to begin supplying locomotives to the Ukrainian market, which will also provide for 35% localization associated with the production and maintenance of electric locomotives.
As reported, Ukraine and France in May signed an intergovernmental agreement on financing the supply by Alstom of 130 heavy-duty electric locomotives for Ukrzaliznytsia for up to EUR 900 million.
This agreement was ratified by the Verkhovna Rada of Ukraine on July 1, 2021.
Alstom is one of the world leaders (along with Siemens and Bombardier) in the production of power equipment and railway transport. It operates in more than 70 countries and employs about 70,000 people.

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