A Chinese road construction company has signed two contracts, totaling $96 million, to rebuild two east-west highways in Ukraine. Next spring, Xinjiang Communications Construction Group Co., of Urumqi, is to start work on an 800 km portion of the M21, running from Stryi, on the Polish border, to Znamenka, near the Dnipro River. At the same time, on the other side of the Dnipro, Xinjiang is to start work on the Poltava-Lubny section of the M03, which runs 900 km from Kyiv to the Russian border, at Dovzhansky, Luhansk. Administered by Ukravtodor, the State Agency for Automobile Roads, and largely paid by a World Bank loan, all work is to be finished by fall 2019.
• The four hour drive between Lviv and the Hungarian border will be cut in half under a plan by Ukraine and the World Bank to upgrade the existing 260 km north-south highway. With Budapest as the ultimate destination, the expanded E471 highway “will be the main artery for exporting Ukrainian goods to Eastern and Southern Europe,” Ukravtodor posted on its Facebook page.
• A consortium of Westinghouse Electric Sweden AB, Poland’s Polenergia International, and EDF, or Électricité de France, want to build a 400 km high voltage transmission line connecting Ukraine’s Khmelnytsky Nuclear Power Plant to the EU energy grid at the Polish border. Known as the Ukraine-EU Energy Bridge, this public private partnership could cost EUR 243 million. Selling nuclear power to Europe could bring as much as EUR 3 billion to Ukraine, according to Economic Development and Trade.
• Singapore and US investors will invest $ 300 million to build a grain terminal, two oil seed extraction plants, and a shipping pier in Liman, a Black Sea port town about 150 km south of Odesa city. Work is to start on the project this fall, which will be carried out by Delta Wilmar of Singapore and Grain Agro Invest of the United States. Delta Wilmar’s new plant will have a handling capacity of 600,000 tons of oil per year. The pier will have a capacity of 3 million tons of oil a year. Both investments are to create 500 jobs, according to the Odesa regional administration.
• As Ukraine banking sector clean up continues, 601 bank branches – about 6 percent of the total -- were closed through September. Over half – 341 – were with state-owned Oschadbank. Another 204 were with three bankrupt banks: Platinum, Diamantbank, and People's Capital. On the upside, four banks have opened branches this year: Alfa-Bank (86); Credit Optima Bank (33); Ukrbudinvestbank (15) and state-owned Ukrgasbank (10). Last year, 1,600 bank branches were closed, about 13 percent of the total.
• Growing exports of food and higher taxes on alcohol and cigarettes are partly to cause for Ukraine's higher than expected inflation rate of 16.4% year over year, writes Elena Belan, chief economist at Dragon Capital. Egg exports are up 70% this year, pushing local prices up 31% in September alone. Looking ahead to the upcoming Oct. 26 central bank meeting, she writes: “Given the stable core inflation, we believe that this time the National Bank will not raise the interest rate, leaving it at the level of 12.5% per year.»
• Turkey-Ukraine trade grew during the first six months of this year by almost 20%, lower than the 25% growth of Ukraine trade with the EU. President Poroshenko said that Turkey is now among Ukraine’s top five trading partners and the top 10 foreign investors.
• Turkey's leading defense company, Aselsan, has signed a $44 million contract with Ukraine to supply defense communications systems, the firm said Tuesday. Turkish National Defense Minister Nurettin Canikli and Ukrainian Defense Minister Stepan Poltorak signed a cooperation protocol on Monday. Earlier this year, Ukroboronprom, the state defense industry conglomerate, signed radar and aircraft production deals with Turkey.
• Rockwell Collins, an American aerospace corporation, has signed a memorandum of cooperation with Kyiv’s Civil Aviation Plant 410. Located adjacent to Kyiv’s Zhuliany airport, the plant repairs Antonovs and Boeings. The announcement came from Ukroboronprom which said the agreement would “significantly expand” the plant’s capabilities to maintain military transport aircraft.
• Exports of flaxseed, used for vegetable oil, jumped 57.5% to a record level in the recently completed marketing year. In the year ending in August, Ukraine exported 63,000 tons of flaxseed, according to UkrAgroConsult. The largest customer was Hungary, which bought 44% percent of all exports.
• Finland-Ukraine trade increased by 13 percent through July, about half the rate of the EU average. Despite the low level of trade -- $174 million -- The Finnish Business Group in Ukraine predicts turnover will grow thanks to new joint Ukrainian-Finnish enterprises in woodworking, mechanical engineering, and paper production. Helsinki-based Containerships Ltd. wants to build container terminals in Ukraine. Ruuki, the steel construction company, is searching for Ukrainian producers.
• Ukraine will build in the Chernobyl exclusion zone a $15 million repository for products of nuclear fuel reprocessing that now are stored in Russia. Currently, Energoatom spends $200 million a year for reprocessing and storing spent fuel from three Ukrainian nuclear power plants - Rivne, Khmelnitsky and South-Ukrainian. In the future, the vitrified waste will be stored at the specialized facility built on the grounds of Vector enterprise, the State Agency for the Exclusion Zone Management told UNIAN.
• The IMF expects Ukraine’s GDP to grow by 2% this year and by 3.2% in 2018. The forecasts are contained in the new World Economic Outlook review. Historically, IMF forecasts are conservative.
The Energy Ministry is suggesting a new gas-price formula for households that would rule out increasing utility tariffs during October-April heating season, Bloomberg reports, citing the ministry website. The IMF wants Ukraine to adhere to its commitment to raise
household gas prices to market levels.
• Credit cards usage can increase by 20% to 14-15 million active cards in Ukraine by 2020, predicts Marina Dutlova, director of retail business of Credit Dnepr Bank. Speaking at a round table in Kyiv, she said that one third of Ukrainian adults do not use credit cards. Mikhail Vlasenko, chairman of Idea Bank, noted one turnoff: “The interest rate on credit cards is very high - from 40% to 50%.”
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UBJ a.m. is reported by UBJ Editor in Chief James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow bureau chief. For comments and story tips, Brooke is reachable at firstname.lastname@example.org