Background Image

Friday, November 8

Rush Hour Truck Ban Starts in Kyiv...Frozen Bridges to Be Completed...EU’s Used Cars Fill Streets...Ukreximbank Joins the Bond Rush...Boryspil Up, Sikorsky Down
James Brooke
by James Brooke
UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief

Starting today, trucks are not allowed to enter the capital on the M-06 highway from Zhytomyr during weekday rush hours: from 7:00 to 10:00, and from 17:00 to 20:00.  Following the practice of many large European cities, the rush hour truck ban will spread to all highways leading into Kyiv. “During rush hours — evening and morning — we will restrict entry,” Yuriy Zozulya, head of Kyiv’s Patrol Police, tells the Center for Transportation Technologies. “Trucks will park at the entrances to Kyiv…As soon as commuters arrive at work, we will start trucks.” From all directions, up to 50,000 trucks drive into Kyiv daily.

Pivdennyi or Southern Bridge bears the brunt of the load. Designed in the late Soviet era to carry 20,000 cars a day, this six-lane, 1.2 km bridge now averages 100,000 cars a day.

Highway construction companies from China, France, Portugal, and Switzerland are asking the Infrastructure Ministry for details on highways that will put up for concession, Minister Krikliy tells UATV. A list prepared by the Ministry and the World Bank includes a ‘Great Ring Road’ around Kyiv and a 75 km highway between Kyiv’s existing Ring Road and Bila Tserkva.

    With road traffic booming, two bridges, long symbols of economic paralysis, are to be completed by 2022.

    In Zaporizhia, Prime Minister Honcharuk stood on a half-completed bridge over the Dnipro Thursday and vowed to complete “in 2-3 years,” a project that started in 2004. Last month, Ukravtodor, the state highway agency,  signed an agreement with China Road and Bridge Corporation to finish the bridge. The cost for completion is estimated at $500 million.

    In Kyiv, Mayor Klitschko promises that the 7.5 km Podilsko-Voskresensky Bridge will open for cars in 2021. Under construction since 1993, the landmark bridge is designed to carry 60,000 vehicles a day. In recent years, it has won worldwide fame as a film set for music videos.

    Ukrainians increasingly drive used imported cars, Oleksander Kozis, chairman of UkrAVTO Corporation, told the Ukrainian Automotive Forum Thursday. In 2008, about half of the 685,000 new vehicle registrations were new imports and half were made in Ukraine. In 2018, new imports and made in Ukraine vehicles were 96,300. Imported used cars totaled 156,800.  During the first 10 months of this year imported used cars totaled 349,000. The top imported brands are: Volkswagen, Skoda, Ford, Renault and Opel.

    So far this year, Ukrainian factories have made 7,000 vehicles, largely buses and trucks. Aivaras Abromavičius, Director General of UkrOboronProm, said the collapse of Ukraine’s auto manufacturing industry is “shocking.”

    Poland’s refusal to grant Ukraine sufficient trucking permits “is economic genocide,” Ukraine’s new trade representative, Taras Kachka, told a Kyiv conference, “Trade Wars: The Art of Defense.” Ukraine needs 230,000 permits for 2020, but Poland will only grant 160,000. “This is stifling our trade with the European Union,” Kachka said.

    To speed trade and tourism with the EU, Ukraine’s 2020 budget includes $20 million to modernize and expand 16 customs checkpoints on Ukraine’s western borders. Work on three checkpoints – Krakovets, Rava-Ruska, and Shehyni – will be carried out using a loan from Poland, Prime Minister Honcharuk told the Cabinet on Wednesday. Ukraine has borders with four EU nations – Romania, Hungary, Slovakia, and Poland.

    State-owned Ukreximbank is placing 10-year Eurobonds for $100 million at 9.95% per annum, report UNIAN, and Interfax-Ukraine. JPMorgan and Morgan Stanley are organizing the issue. A roadshow took place this week in London, Frankfurt, and Zurich. With assets of $8.8 billion, Ukreximbank is Ukraine’s third-largest bank, after PrivatBank and Oschadbank.

    Foreign investment in hryvnia denominated bonds hit the equivalent of $4 billion, boosted by $43 million of purchases at Tuesday’s weekly auction, reports the National Bank of Ukraine website. Since the start of the year, foreign investment in Ukraine’s government bonds has increased 16-fold, boosted in part by the May trading link with Clearstream. Foreigners now own 12.5% of Ukrainian internal government securities. If bonds in the portfolio of the National Bank are removed, the foreign participation in the market rises to about 40%.

    The EBRD has raised its 2019 Ukraine GDP growth figure to 3.3%. This is three times the European Commission forecast for 2019 Eurozone growth – 1.1%. For next year, the EBRD predicts the growth of 3.5%, the same as neighboring Poland.

    Chornobyl tourism is running at twice the level of last year, reports Ukraine’s State Agency of on Exclusion Zone Management. With October recording a monthly record, 107,000 tourists have visited this year. The authorities cite “increased interest in the Chornobyl NPP after the release of HBO’s mini-series Chernobyl.”  Foreigners account for 80% of visitors. Top countries are: Britain – 15,738; Poland – 9,378; Germany – 7,826; US – 5,580; and  Czech Republic — 4,063.

    Aviation News:

    Motor Sich is canceling most of its flights from Kyiv to Odesa and from Kyiv to Lviv. The airline is focusing on flights from its Zaporozhia base. From that city, Motor Sich flies to Kyiv Sikorsky twice a day and to Minsk four times a week.

    UIA continues to pare money-losing flights. Starting Nov. 16, Kyiv Boryspil-Bangkok will be reduced to three times a week, and then completely ended March 29. On Jan. 14, UIA will stop flying to Krakow, a newly competitive route. In the last year, Ryanair started flying from Boryspil to Krakow and Wizz Air started flying from Kyiv Sikorsky to Krakow.

    Through October, Kyiv Boryspil, Ukraine’s largest airport, handled 13 million passengers — 22% more passengers y-o-y. Passengers on charter flights were up 26%, to 3.2 million. Transfer passengers, a specialty for the UIA hub, were down 3% through October, to 2.8 million. In October, transfer passengers were down 15%. Overall, transfer passengers accounted for 22% of the people using Boryspil.

    Kyiv Sikorsky bucked a national trend, seeing its passengers drop by 8% through October, to 2.2 million. With Boryspil opening Terminal F as its low-cost terminal last spring, Sikorsky lost SkyUp, Pegasus, and Yanair. In addition, Sikorsky’s lone runway was closed for 10 days in September for scheduled repairs. With 98% of Sikorsky passengers flying international, Kyiv’s Right Bank airport is largely the preserve of Wizz Air and Ernest Airlines.

    From the Editor:  Have a good weekend! Best regards Jim Brooke