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  • Ukraine Wants to Supply Hydrogen to Germany
  • Germany: Get Straight With Solar and Wind
  • €22 Million Planned for International Schools in Kyiv’s City
  • UIA, Windrose Plan Flights to New York

With its East-West gas pipelines, Ukraine would like to become a major supplier of hydrogen to Germany, Prime Minister Denys Shmyhal said at the first German-Ukrainian Energy Day. “The development of hydrogen energy is a priority for Ukraine,” he said, alluding to the fast growing energy source. “It is an opportunity to use the existing potential of green energy and attract investments in the development of a green economy.” 

Anka Feldhusen, Germany’s ambassador and host of the event, cautioned that Ukraine should first pay its $1 billion debt to wind and solar producers. One of 11 ambassadors to send a letter last month to Shmyhal about the mounting debt, Feldhusen said diplomatically: “I would not want Ukraine to lose its attractiveness to foreign investors because of this story.”

In Ukraine, DTEK is the pioneer in the hydrogen energy field, becoming Ukraine’s first company to join Hydrogen Europe, an association where European leaders exchange strategies and forge partnerships in hydrogen technologies. Emanuele Volpe, DTEK’s Chief Innovation Officer, said at the conference: “DTEK plans to launch a local hydrogen pilot project that will act as a catalyst for gradual development of the sector and accelerate the introduction of regulatory, technical, commercial, and logistics measures required to give a boost to the industry.”

Ukraine’s central bank decided to keep the prime interest rate at 6%, the level unchanged since JuneAlthough inflation in November rose to 3.8%, the National Bank of Ukraine does not see it as an immediate threat. “Cooperation with the [IMF] remains fundamental for the recovery of Ukraine’s economy,” wrote a message posted on the bank website. “Financing provided by the IMF and other international partners is crucial for the planned budgetary spending.” 


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In a housecleaning exercise, the Cabinet of Ministers decided to transfer 18 enterprises of the UkrOboronProm defense conglomerate to the State Property Fund for privatization.  With a total value listed at $10 million, the companies are expected to be sold largely for their scrap metal and real estate. Of the 18 companies, 11 no longer function. Five lost a total of $530 million during the first half of this year. A legacy of the Soviet military industrial complex of the 1980s, the list includes such entities as the Vinnytsia Aviation Plant, the Zakarpattia Helicopter Production Association, and the Lviv Radio Engineering Research Institute.

The Black Sea Trade and Development Bank is extending at 9-year, €10 million loan to the Novopechersk School to build a new campus at Kyiv’s UNIT.City, nearly tripling enrolment to 1,200 students. Zoya Litvin, head of Osvitoria, the controlling non-profit association, says the K-12 school “will focus on STEM and IT, sectors that will develop the fastest in the future.”Litvin’s husband, Vasily Khmelnitsky, is developing UNIT.City as Ukraine’s largest hub for IT companies. Built on the 25-hectare grounds of a former motorcycle factory, UNIT.City expects to have 15,000 residents by 2025.

Parents of Kyiv’s French school are voting on an 18-month, €12 million project to build a 6,000 square meter unified campus at Unit.City. The project for Lycée Français Anne de Kiev would bring under one roof 750 K-12 students who now are divided among three buildings in central Kyiv and Podil. French government guarantees could cover bonds or loans raised to finance construction.

Ukrainians’ spending on foreign travel dropped in half this year, to $4.5 billion from $8.7 billion, Dmitry Sologub, a deputy governor of the National Bank of Ukraine, told reporters. “It was a significant factor in improving our current account,” he said. “Travel companies from March to June did not buy foreign currency at all, then they began to buy, but purchases remained low.” He expects foreign travel spending to rebound slowly next year, probably to $5 billion.

Starting March 28, UIA promises to gradually, but “completely restore” its international route network, the airline says in a note posted on its site. Ukraine’s flag carrier plans to restore 43 international routes, including flights from Kyiv Boryspil to: New York, Toronto, Cairo, Delhi, Dubai, Jeddah, London Heathrow and London Gatwick, and 22 EU cities. Domestic flights will be operated from Kyiv Boryspil to: Dnipro, Ivano-Frankivsk, Kharkiv, Kherson, Lviv, Odesa and Zaporizhia.

Windrose Airlines has applied to the US Department of Transportation to fly passengers and cargo between Ukraine and New York, reports the US-based aviation news site, One Mile at the Time. The airline, controlled by Ihor Kolomoisky, recently leased an Airbus A330-200, a wide body, two-aisle plane which can seat 400 passengers in three classes.  “The airline will apparently use this A330 for charter services to New York and Hong Kong,” writes the news site, citing the US filing. “Windrose further anticipates directly operating ad hoc charters to and from the United States using its own metal.”

Passenger traffic at Kyiv Sikorsky through November totalled 670,900 passengers – 18% of the level of the first 11 months of last year. In November, Kyiv’s right bank airport handled only 13% the volume of November last year. The airport is on track to finish this year with a passenger volume slightly below 2013.

 

  • Santa Claus Comes Early: $1.5 billion from EU and EIB
  • Aid Will Help Rebuild Ukraine-controlled Donbas
  • Lockdown Returns: Jan 8-24
  • Vaccines Arrive at the Same Time

The EU and the European Investment Bank extended a total of €1.24 billion euros in aid and loans to Ukraine last week. Coming without a public signal from the IMF, the aid is seen as helping the Finance Ministry go to market in coming days to raise up to $3 billion in Eurobonds to close the year end financing gap.

In a surprise move, the EU disbursed €600 million in aid that originally had been approved in April. Billed as aid in the fight against coronavirus, the aid came the day after top EU officials criticized a new anti-corruption law as weak. The EU stressed that release of a second tranche from the €1.2 billon package will be subject to compliance with conditions, largely in curbing corruption.

Prime Minister Shmygal, who has said the government could turn to the Eurobond market in coming days, welcomed the money, saying: “This is an important signal from our European partners, because such decisions demonstrate support for our European integration course and the reforms taking place in Ukraine.”

Concorde Capital’s Alexander Paraschiy writes: “This is an unexpected move, taking into account that as recently as yesterday the EU officials criticized the Ukrainian government for the slow and insufficient recovery of its anti-corruption infrastructure after the damage done by Ukraine’s Constitutional Court on Oct. 27. Nevertheless, this is a positive development that will allow Ukraine to partially cover its huge budget financing gap by the end of 2020.”

The new law “has several deficiencies and does not produce the necessary deterrent and corruption prevention effect,” is the EU press summary of comments made to Shmygal by EU High Representative for Foreign Affairs and Security Policy Josep Borrel and EU Commissioner for Neighbourhood and Enlargement Olivér Várhelyi. The Prime Minister’s website does not make mention of this part of the call.

In announcing the disbursement of the first €600 million tranche, the European Commission press office said: The disbursement of the second tranche will be conditional on fulfilling the eight specific measures laid down at the MoU. These include measures in the areas of public finance management, the fight against corruption, improving the business environment and the governance of state-owned enterprises.”

Separately, the European Investment Bank signed three low interest loans totaling €640 million with Prime Minister Shmyhal. About two thirds of the loans go to rebuild hospitals, schools, kindergartens and sewage systems in 20 small cities in the Ukraine-controlled half of the Donbas.  €100 million will go to repair 183 km of roads in Luhansk.

Bank President Werner Hoyer said during the signing that the loans will help 13.7 million people living in southeast Ukraine. The loan package includes €200 million to improve urban transport across Ukraine, including Kyiv and Kharkiv, largely for electric buses, trams, trolleys and metro cars, reports the Infrastructure Ministry. Shmyhal said the loans “will provide economic, environmental and social benefits for the citizens of Ukraine for many years.”

The package is part of €1 billion in European Investment Bank aid extended to Ukraine this year, Jean-Erik De Zagon, the Bank’s resident representative here, told reporters. Currently Ukraine accounts for 50% of the Bank’s loans. Since 2007, Ukraine is the main recipient of the Bank in Eastern Europe, receiving a total of €6.83 billion in loans and guarantees.

Some of the money is for reducing the isolation of the Azov Sea region by improving road and rail connections to Mariupol and Berdyansk. In step in that direction, Ukrzaliznytsia started on Sunday a daily night train from Kyiv Passenger Station to Avdiivka, Donetsk, Rada Deputy Musa Magomedov writes on Facebook. The terminus for this 14-hour train ride will be Avdiivka Station, about 1 km from the front line.

To brake the mid-winter spread of coronavirus, the government will impose a January 8-24 lockdown, essentially a 2-week extension to the Christmas and New Year holidays. At a Cabinet meeting, Prime Minister Shmygal said employers should encourage employees to work from home. Buses, trams, and trolleys will work on a seated basis. Only the metro will run with standees. Domestic and foreign air travel is not to be restricted.

Open will be: food stores, banks, pharmacies, hotels, post offices, kindergartens, restaurants for take out only, and barber shops and beauty salons by appointment only.

Closed will be: shopping centers, schools, hostels, gyms, swimming pools, cinemas, theaters, art galleries, and museums.

Until the lockdown, several cities will have Christmas fairs and concerts. Ski areas and churches are to operate unimpeded, Deputy Health Minister Viktor Lyashko said, before the lockdown was announced.

The lockdown plan comes as daily new infections receded last week to the 12,000 range, well below the average of 16,500 recorded 2 weeks ago. However, Kyiv is recording a peak of 1,700 new cases a day this week. In Lviv, Mayor Andriy Sadovyi is the latest politician to battle the disease.

Vaccines should arrive in Ukraine next month, says Ihor Kuzin, the Health Ministry’s Public Health Director. Under the COVAX global initiative, Ukraine is to initially receive 8 million doses of the two-jab kind. This means that 4 million people, about 10% of Ukraine’s population could get vaccinated this winter. Next year, the government plans to vaccinate about half of Ukraine’s population.

With Ukrainians reluctant to take mass transit during the coronavirus epidemic, first time registrations of imported used cars hit 313,300 through November, four times the number of new imported cars, reports Ukravtoprom, the vehicle industry association. In November, the Ukrainians registered 32,200 thousand used imported cars. This is up 12% you and 4.5 times more than the number of new cars registered last month.

For those who want to ski in peace, UIA and SkyUp start flying this month from Ukraine to Turkey’s Anatolian mountains. UIA announced it will fly from Kyiv Boryspil, Kharkiv, Odesa and Zaporizhia to Kayseri and from Kyiv to Erzurum. Starting Dec. 27, SkyUp will fly from Kyiv to Kayseri.

 

  • Food Exports Down, Earnings Up
  • To Raise Debt, Gov’t Raises Bond Yields Above 10%
  • Foreign Tourists to Kyiv Down 85%
  • UIA Lays Off Pilots, Asks for Help

99% of the 2021 harvest is in, reported the Ministry of Economy, Trade and Agriculture. Harvested from 24 million hectares, an expanse the size of Britain, Ukraine’s harvest is expected to be well below last year’s bumper crop. Due to drought, the corn crop could be down by 25% and the sugar beet crop down by 30%.

Measured in volume, grain exports are down by 14% — to 20 million tons – since the marketing year started July 1. Corn exports are down 26% yoy, to 6 million tons. Wheat exports are down 11.5%, to 12 million tons. By June 2021, the government predicted that Ukraine’s grain exports could be down 17% over last year’s record exports of 57 million tons.

World prices are boosting Ukraine’s earnings from the export of food, the nation’s biggest foreign currency earner. World food prices rose in October and November, hitting their highest levels in six years, according to the UN Food and Agriculture Organisation. The FAO said that November world food prices are 6% higher than one year earlier. One major Ukrainian export, vegetable oil, jumped 14.5% in November alone, hitting the highest price since March 2014. Cereal prices are up 20% compared to one year ago. Export prices for Ukrainian corn are up 36% yoy.

Capital investment in farming dropped by 43% during the first three quarters, to just below $1 billion, reported the Institute of Agrarian Economics. Citing State Statistics Data, the Institute notes the investment collapse in farming came as overall capital investment in Ukraine fell by 35% yoy, to just under $10 billion for the January-September period.

The Finance Ministry raised all its hryvnia bond yields above 10% and succeeded in selling six times more paper than one week earlier. At last Tuesday auction, hryvnia bond yields went up by 11 basis points to 30 basis points, according to a Finance Ministry post on Facebook. To draw demand the Ministry also offered a full range of six hryvnia bonds — 3 months, 6 months, 1 year, 2 years, 4 years and 5 years.

Of the $560 million raised, about one third was from the sale of 1-year dollar bonds, which carried an average weighted yield of 3.79%. By contrast, 1-year hryvnia bonds carried a yield of 11.22% With the government short of money to cover the budget deficit, investors expect large bond sales — domestically and abroad.

ICU wrote of last week’s auction: “Foreigners are monitoring the market and watching the trend in rate increases, waiting for the optimal time to make new investments. That could be when the increase in rates stops and the hryvnia exchange rate appears to bottom out. We can expect foreigners to again purchase new issues, on the background of increase in the appetite of portfolio investors to EM assets.”

The Central Bank is expected to keep Ukraine’s prime rate at the historically low level of 6% at Thursday’s policy meeting. In a Reuters poll of 15 analysts, 14 predicted that the National Bank of Ukraine will keep the rate at 6%, the level attained last June. Since then, Ukraine’s inflation has fallen, hitting 2.6% yoy in October. The analysts predicted that more government spending and a high minimum wage will push up Ukraine’s to 4.2% at the end of this year, and to 6.1% at the end of next year.

Betting on the growth of e-commerce, Ukrposhta plans to start building a 600,000 square meters of mail and package sorting centers next year. Largely funded with EBRD and European Investment Bank loans totalling 93 million euros, the state post office plans to build 62 depots and eight 8 sorting hubs, in: Kyiv (on the left and right banks), in Lviv, Kharkiv, Dnipro, Khmelnitskiy, Odesa and Pokrovsk, the rail hub city in Donetsk region. The first tenders will go out in coming days, Igor Suhodubovsky, head of construction for Ukrposhta, told a logistics conference.

Foreign tourists visiting Kyiv this year fell to 300,000 – 15% of the 2 million who visited last year. With national tourists not filling the gap, Kyiv’s tourism industry – hotel, restaurants, nightclubs and tour operators – lost $1 billion this year, estimated Maryna Radova, head of Tourism and Promotion of the Kyiv City Administration. Similarly, the hotel tourism tax revenues has fallen almost in half, to $1.2 million, she told a forum at Ukrinform, “Restoration of the Tourism Sector in Kyiv Amid a Pandemic.”

Wizz Air restores this month many flights to the EU from Kyiv Sikorsly, Kharkiv and Lviv, reports the Hungary-based low-cost carrier. If a flight is cancelled due to coronavirus restrictions, Wizz Air says it will refund 125% of the paid fare. In coming days, these flights resume: from Kyiv to Copenhagen, Pardubice, Billun, Vienna, Krakow, Lisbon, Hamburg, Budapest, Naples, Poznan, Bratislava, Katowice; from Lviv to Berlin, Szczecin, Bratislava, Pardubice, Vilnius; and from Kharkiv to Krakow, Dortmund, Vienna, Gdansk and Wroclaw.

Preparing to lay off 150 pilots, UIA appealed to President Zelenskiy, asking for a low interest loan and relief on debts owed to Ukraine’s air traffic control agency and to Boryspil Aiport, UIA’s hub. “UIA, like other air carriers of Ukraine, require immediate measures of state support, which will allow them to survive until the resumption of demand and opportunities for international air transportation,” the airline’s executives wrote in a letter to Zelenskiy. UIA said its passenger traffic is running at 85% of 2019 levels and that it already has laid off 1,000 employees. Ukraine’s national flag carrier, plans to restore much of its route network in April, aiming to carry in 2021 64% of the passengers it carried in 2019.

Since April, UIA has processed 60% of demands for ticket returns, refunding $22 million, the airline reports. Another 56,000 requests await processing. As part of personnel cuts at UIA, the airline’s telephone information center has been closed.

UIA’s sister airline, Windrose Airlines continues its expansion into the Balkans, starting flights this week from Kyiv Boryspil to Belgrade, Serbia, and from Boryspil to Skopje, North Macedonia. In recent weeks, Windrose started flights from Boryspil to: Ljubljana, Slovenia; to Zagreb, Croatia; and to Podgorica, Montenegro. Windrose uses its newly expanded fleet of commuter planes – Embraer 145s and ATR 72-600s.

 

  • Ukraine’s Economic Recovery to Start in Spring
  • Infrastructure Investment Saves Construction
  • More Mortgages, Small Business Loans
  • Black Week Saved Black Friday
  • Real Wages Grow
  • Turkey-Ukraine Talk of Building Rockets

The prolonged coronavirus pandemic will stretch Ukraine’s economic recession through the winter, Economy Minister Ihor Petrashko predicted. But after a 3% GDP yoy drop in the first quarter, growth will resume in April, he told the Ukrainian Investment Roadshow. Growth will continue strongly, allowing Ukraine to end 2021 with 4.6% GDP growth, he said. Such a U-shaped economic recovery would cancel out the 5% GDP drop forecast for 2020.

Big government spending on infrastructure is singlehandedly pulling the construction sector into positive territory this year, according to analysis by Alfa-Bank Ukraine. Through October, construction is up by 1.9% yoy. A 10.6% rise in infrastructure investment was enough to offset a 18.7% drop in housing construction. Alfa reports: “Spending on roads more than doubled compared to the previous year.”

Overall, the government’s Big Construction’s share of GDP grew from 2.8% in the first quarter, to 10% in the fourth quarter, Mikhail Kukhar, chief economist of Ukraine Economic Outlook, said last week at a road industry forum. He said: “The decline in our country’s GDP would have been 11% in the fourth quarter, if not for the Big Construction project.” The Q4 decline is expected to be about 3.7%.

By the end of this month, the goals of the Big Construction project should be 95% complete, Kyrylo Tymoshenko, deputy presidential chief of staff, tells Interfax-Ukraine. The completion scorecard is: 200 schools and kindergartens: 93% complete; 4,000 km of state roads: 92% complete: and 100 sports facilities – 87% complete. For schools, the construction means new buildings for 8,338 students and renovated buildings for 55,000 students.

Europe’s biggest floating crane is being towed from Istanbul to Zaporizhia to complete the long-delayed bridge over the Dnipro, reports Ukravtodor. When erect, the crane rises 148 meters – nearly the height of Kyiv’s Parus office tower. The bridge complex is 9 km long. Onur, the Turkish company which is carrying out the $400 million contract to complete the bridge says part of the route will open to vehicles at the end of this month.

Since March $518 million in loans have been extended to small businesses, a factor in mitigating the impact of the coronavirus recession, the Finance Ministry reported.  Under the ‘5-7-9% Loans’ program, 6,300 loans have been extended to businesses with less than $3.5 million in annual revenue. Of the total, 68% of the loan money has gone to refinance existing debt, the Finance Ministry reported. There are 23 private and state banks participating in the program.

Home mortgage loans, long a rarity in Ukraine, are up 23% yoy, totalling almost $100 million through October. The average size is for $26,000, and 87% are for second homes, reports the National Bank of Ukraine. The secondary home market is more popular because rates are lower – 14.3% – than for first homes – 17.2%.

By replacing ‘Black Friday’ sales with ‘Black Week’ sales, merchants managed to save what could have been a bleak start to the holiday season, Ukrainian bankers tell Interfax-Ukraine. Charges with Akkord bank cards were up 38% this year, compared to a 47% increased last year. At Kreditvest Bank, Chairman Vasily Nevmerzhitsky said the week over week sales were up only 20-30%. He said: “If we compare sales on Black Friday in 2019 and in Black Week in 2020, the total drop in sales was about 40%.”

By contrast, the MOYO chain of electronics stores says it doubled its sales on Black Friday. Sales were boosted partly by a 16% increase in stores, to 36, and by keeping one store in Kyiv open around the clock. MOYO CEO Valentin Ivakin said: “The number orders and their amount twice exceeded the record of 2019.”

JYSK, which has a chain of 71 furniture stores in Ukraine, recorded a 10% increase in sales in November compared to last year. Evgeniy Ivanitsa, country director of the Danish-based firm, said this increase was reached by stretching the sales over eight days and attracting 1.5 million visits to their online store.

Real wages jumped 11% yoy in October, reports the State Statistics Service. Reflecting the impact of the coronavirus epidemic, the fastest growing wages were in healthcare – up 54%. The worst performing were in hotels and restaurants, where pay was stagnant.

The national monthly average wage is $430. The highest wages are in: Kyiv City – $618; Ukraine-controlled Donetsk – $479; and Kyiv Region – $456. Of the 24 regions, wages grew the fastest in: Chernivtsi and Kherson – 21%; Rivne and Mykolaiv – 20%; Zakarpatti, Ivano-Frankivsk and Kirovohrad – 19%; Ternopil – 18%; Zhytomyr – 17%, and Luhansk – 16%.

Concorde Capital’s Evgeniya Akhtyrko attributes “the fast growth of real wages to the minimum wage being hiked to UAH 5,000 a month starting Sept.1, relatively low consumer inflation, and the increased demand for labor amid economic stabilization.“

Next year’s planned 30% hike in the minimum wage will be postponed five months, until Dec. 1, Finance Minister Serhiy Marchenko confirms. The increase, to $228 a month, is being delayed to keep down inflation and to reduce the government budget deficit. Many government payments are indexed to the minimum wage.

For the statistics-addicted, the State Statistics Service has launched a mobile application “Statistics in a smartphone.” Oleg Nemchinov, Minister of the Cabinet of Ministers, says the new service offers graphs and numbers for: GDP, population, labor market, prices, industry, agriculture, construction, transport, and trade.qwöl2syna                    8u

Ukraine is discussing with Turkey the joint creation of launch vehicles for commercial launches of satellites into space, Ukraine’s Strategic Industries Minister Oleg Urusky tells Radio Svoboda. Ukraine’s Yuzhnoye Design Bureau works with Northrop Grumman to  produce expendable rockets for placing satellites in low-Earth orbits. Ukraine and Turkey would need to use a third country cosmodrome, Urusky said. Until 2015, Ukraine had a project with Brazil to launch Ukraine’s Cyclone-4 carrier rockets from Brazil’s Alcântara Launch Center, near the Equator.

 

  • Rada Passes Compromise Anti-Corruption Bill
  • Ukraine Bonds Perform Well on World Market
  • China Expands Trade and Tech
  • Ukraine Modernizes Planes, Trains and Trucks

In a bid to unlock billions of dollars in low interest IMF loans, the Rada restored accountability for false asset declarations, albeit a watered down version. The new bill raised the limit for ‘forgetting’ an asset 9-fold, essentially from a car to a house. Officials who are not caught in two years, get off free. Fines range from $1,500 to $3,000. The possibility of imprisonment is lifted.

Anti-corruption groups have protested. President Zelenskiy wrote on Facebook: “It is a pity that the responsibility is still not as tough as we would like.” But he made clear he would sign the compromise bill. There was no comment from the IMF.

Ukrainian bonds are among the best performing in emerging markets in the post-US-election rally, reports Tellimer Research. “Sovereign bonds lead the way, tightening 100-150bps in November and outperforming EM indices, despite uncertainty over IMF funding and the devastating effect of coronavirus on the Ukrainian economy,” writes analyst Kiti Pantskhava. Among the corporates, Kernel and Metinvest are the best performers.

With Britain apparently heading toward a ‘hard Brexit’ three weeks from now, Ukraine is asking the UK to negotiate a bilateral trade deal to lower tariffs.  Prime Minister Shmygal asked UK Ambassador Melinda Simmons to start trade talks this month, even before the new bilateral trade treaty is ratified by the Rada. Signed in October by President Zelenskiy, the new trade treaty essentially continues on a bilateral level the trade rules that already exist for the UK as part of the EU.

Representatives of over 100 Ukrainian companies took part remotely in a China-Ukraine investment fair, hosted in Beijing, reports china.org.cn news site. With almost 300 Chinese and Ukrainian business and government officials participating, the annual conference took on new importance this year with the emergence of China as Ukraine’s top trading partner. At the conference, the China-Ukraine Bilateral Entrepreneurs Council announced the establishment of a liaison office in Harbin, capital of northeast China’s Heilongjiang province. Harbin mayor Sun Zhe said his city has worked well with Ukraine in such fields as aerospace, new materials and modern agriculture.

Huawei Ukraine is helping the Digital Transformation Ministry open a center “for students and future entrepreneurs” at Kyiv’s Taras Shevchenko National University. “This initiative opens up new opportunities for the development of talent in the digital world,” said Ding Ning, Huawei’s deputy director of supply and service. Last July, Ding signed an agreement with Kyiv Polytechnic Institute to open an “Academy of Information and Web Technologies.” KPI wrote on its Facebook page: “The University will become a platform for promoting Huawei technologies and ideas on the Ukrainian market. Huawei company cooperates with more than 900 universities overseas on opening ICT academies authorised by Huawei.”

For the first time since Independence, Ukraine’s Defense Ministry is about to order new planes from Antonov, Strategic Industries Minister Oleh Urusky tells Radio Svoboda. “A contract will be signed between the Ministry of Defense and the Antonov State Enterprise for three An-178 aircraft, which will be the first time in Ukraine since independence,” he says. “We have never ordered new planes.” An-178 is a Ukrainian medium-haul transport jet with a range of 3,680 km, cargo load of 18 tons, and capacity to carry 90 soldiers. Turkey and Antonov are negotiating joint production of the An-178. During the summer of 2014, at the height of the Ukraine-Russia air war over the Donbas, three Ukrainian Air Force transport planes were shot down – an Antonov An-26, an Antonov An-30 and an Ilyushin Il-76.

Calling the condition of the state railroad’s freight wagons “catastrophic“, the Cabinet of Ministers has adopted a “program of radical renewal – replacing all 63,000 in the state fleet over this decade, reports the Ministry of Economic, Development, Trade and Agriculture. With some wagons dating back to the 1960s, more than 90% of the wagons are past their service life. Noting that 24,000 used wagons have been imported in recent years from Russia, the Ministry warns that Ukraine risks “becoming a place for railway scrap written off by neighboring countries where operating restrictions apply.”

A total renewal of the wagon fleet will generate “billions of Hryvnia of government orders for Ukrainian manufacturers, hundreds of thousands of jobs, additional GDP growth of 2% per year,” the ministry predicts. Separately, private logistics operators in Ukraine own another 50,000 wagons. Private companies complain that when Ukrzaliznytsia locomotives bring their wagons into UZ workshops, they are often cannibalized for parts, usually brake pads. Last week, UZ signed the first contract with a private company – Lviv-based Ukrainian Locomotive Company – to haul cargo on UZ tracks.

Cracking down on overloaded trucks, the National Police checked 75,000 trucks last month, almost four times the number of checks performed in November of last year. So far this year, police have 665,000 trucks, almost double last year. With about 2% of trucks fined for violating weight restrictions, fines this year have totaled $4.5 million. By this time next year, there are to be 150 ‘Weight-in-Motion’ devices installed on Ukraine’s highways.

Air cargo through Kyiv-Boryspil is down by only 10% through November, compared to the first 11 months of last year. Air cargo dropped to 33,400 tons, Anton Borisyuk, the airport’s strategic development director said. By contrast, through October, passenger traffic was down by two thirds, hitting 4.5 million. Transfer passengers were down by 85%, passengers on regularly scheduled flights were down by 78%, and charter passengers were down by 40%.

The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.

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