Ukrzaliznytsia General Electric Deal: Ukraine’s $1B Rail Bet

Ukrzaliznytsia General Electric deal marks a $1B push to modernize Ukraine’s railways, boost locomotives, and deepen US-Ukraine business ties.

As specified by PR department of the Investment Office, UkraineInvest, the signed documents provide a template for a 15-year program of cooperation between the companies. The framework agreement discusses the production of up to 225 new and modernization of 75 used main diesel locomotives with a significant degree (up to 40%) of localization in Ukraine.

As part of the first phase of the agreement, a purchase and sale agreement was signed between General Electric and Ukreximbank dealing with the supply and production of 30 new GE GEO locomotives in Ukraine in 2018-2019, which will then be transferred to the financial lease of PJSC Ukrzaliznytsya.

As part of the first phase of the agreement, a purchase and sale agreement was signed between General Electric and Ukreximbank dealing with the supply and production of 30 new GE GEO locomotives in Ukraine in 2018-2019, which will then be transferred to the financial lease of PJSC Ukrzaliznytsya.

Also, Yevgeny Kravtsov, the head of the board of Ukrzaliznytsia, said the agreement would give a powerful impetus to the society and domestic engineering: “Ukrzaliznytsya” was not buying any locomotives for the last ten years. The batch that General Electric will supply in cooperation with Ukrainian enterprises is the largest one in the nowadays Ukraine”.

At the end of 2018 and during the first quarter of 2019, 30 TE diesel locomotives with a localization level of 10% are expected to be delivered. Their production starts in early 2018 in the US, the first deliveries are expected this fall – says the press service of Ukrzaliznytsia.

General Electric Transportation has a positive experience in operating locomotives of its own production series TE33A, TE33AS on railways with a gauge of 1520 mm in Kazakhstan, Mongolia, Azerbaijan, Tajikistan, Turkmenistan, and Kyrgyzstan.

Diesel locomotives ТЭ33АС are adapted to climatic conditions of space 1520 mm, meet ecology standards, reliable, inexpensive in maintenance, and comfortable for a locomotive crew. In comparison with diesel locomotives 2TE10 and 2TE116, the harmful emissions had been reduced by more than 40%. These are the diesel locomotives of a new generation, with asynchronous traction motors with a capacity of 3356 kW. The design speed is 120 km / h.

Currently, there are 609 main diesel locomotives of various series (2Te116, M62, 2M62v / i, 2TEe10 v / i) in the inventory of locomotive park “Ukrzaliznytsia”, their depreciation is 100%, and the average age is 31 years with a normative service life of 20 years.

Ukrzaliznitsa signed several contracts with the US corporation General Electric. The first one is for the delivery of 30 freight diesel locomotives of the Evolution TE33A series for about $ 140 million (with VAT), so one American locomotive will cost $ 4.5 million.

Another agreement provides for the delivery within a period of 7 years,150 to 175 diesel locomotives. According to the conditions of the Ukrainian side, this equipment should consist of not less than 40% of the Ukrainian components. To localize the production of locomotives in Ukraine, General Electric must determine the production base among Ukrainian enterprises.

GE is also to modernize 75 old locomotives from the park “Ukrzaliznytsia”. Also, there is a plan to create a new equipment service center in Ukraine.

EMPR

Source: bizcensor.net