Bombardier, one of the world’s largest train manufacturers, could be involved in work to modernize Ukraine’s aging fleet of locomotives, the Canadian company has said.
Bombardier
Transportation signed a Memorandum of Understanding with Ukrainian Railways Administration
Ukrzaliznytsya (UZ) on July 11. The parties agreed to work together to determine
ways to upgrade the locomotive fleet. It took one-and-a-half years to agree on
the memorandum, according to Ukraine’s former infrastructure minister, Andrei
Pivovarsky.
Ukraine does not now
produce its own locomotives: some 98 percent of its locomotives are obsolete,
with most having been bought before 2001.
“Ukraine is really
what we call a typical railway country,” Flavio Canetti, the head of business development unit
at Bombardier Transportation told the Kyiv Post. It is a vast country with a
large rail network, on which the country’s economy depends, he said. At the
same time, there is a huge need for modernization and the replacement of
equipment.
Canetti said that
among other things that made Ukraine interesting to his company is “the
capability of the people,” and the presence of enterprises related to the
railway industry, as well as institutes “where young people can study rail
technologies.”
Free trade
Another incentive for
Bombardier to come to Ukraine could be the recently signed free-trade pact
between Ukraine and Canada. Canetti said that this kind of agreement was
important to set clear rules for business.
“What do we expect? It
is, of course, a more stable business environment in the county,” Canetti said.
“More than that — it will contribute to an increase of trust in each other,
and probably, at the moment, increasing trust in Ukrainian capabilities and
Ukrainian business will finally help the country’s economy to grow.”
The memorandum,
however, does not include any set figures or timeframes. Bombardier has simply been
discussing with the Infrastructure Ministry and several potential Ukrainian partners
possible options for cooperation – from manufacturing components in an already
existing facility, to adapting an existing facility for the joint production of
complete locomotives, or to building an entirely new facility.
So far, as Canetti
understands, the highest priority of UZ is the joint production of electric
freight locomotives in Ukraine.
However, Bombardier is
not the only corporation that is eyeing the Ukrainian rail industry.
On July 14, U.S.
company General Electric signed an agreement with UZ to ship one of its
locomotives to Ukraine for testing on the Ukrainian rail network. The locomotive
will arrive in several weeks, and will be tested for four months.
Germany’s Siemens and
France’s Alstome are also looking at the market, Ukrainian Infrastructure
Minister Volodymyr Omelyan told the Kyiv Post on July 20.
300 locomotives
However, future
cooperation with foreign partners ultimately depends on UZ’s requirements and the
funds available to it.
In June, then-acting
CEO of UZ Yevgeniy Kravtsov estimated that the company would need up to 300
locomotives over the next 5-10 years. Earlier, in May, Omelyan told the local
media that 150 million euros could be secured to pay for the trains — 10
million euros of Ukrainian funds, as well as 140 million euros funds from Germany
and the European Bank for Reconstruction and Development.
Omelyan told the Kyiv
Post that the government was considering starting with semi-knocked-down
assembly, with most parts being imported. The plan is then to shift to
completely knocked-down assembly, and transition to producing components in
Ukraine.
He cited Kazakhstan as
an example: General Electric started production there five years ago, and now
70 percent of the components it uses are manufactured in the country.
The minister said that
it would become clear who would modernize Ukraine’s railway rolling stock after
UZ presents its five-year plan. But it is unlikely that there will be more than
two foreign companies taking part in addition to a domestic firm, the Kryukov
Railway Car Plant, as a larger number would be too expensive.
“The niches of General
Electric and Bombardier are different,” Omelyan said. ”Bombardier (is
specialized in) electric locomotives, General Electric is (specialized in)
diesel locomotives. There won’t be competition between them.”
“But we’ll see. If
Siemens is really interested, it’ll come as well.”
Kyiv Post staff writer Olena Savchuk can be reached at [email protected]
