Ukrainian Railways to be placed under Deutsche Bahn management

The Ukrainian government intends to place Ukrainian
Railways (RAILUA), the state railway monopoly, under the 10-year management of
German-based railway operator Deutsche Bahn AG, PM Oleksiy Honcharuk told the
Ukrainian Breakfast in Davos on Jan. 23. Despite the details needing to be
agreed upon, the necessary political commitment has been made by Ukrainian
officials, he said, as reported by the epravda.com.ua news site.

On Jan. 22 in Davos, Ukraine’s infrastructure minister
and a Deutsche Bahn official signed a memorandum on cooperation in the
development of Ukrainian Railways. Based on the document, the sides will “explore
the possibilities of establishing strategic partnership” to implement “the best
management practices” at Ukrainian Railways.

Alexander Paraschiy: Whatever
form this partnership will take, it looks positive for Ukrainian Railways. The
involvement of foreign advisers raises the chances that many legal initiatives
to benefit the company will be implemented. Moreover, the implementation of
effective management practices under Deutsche Bahn’s supervision should improve
Ukrainian Railways’ operating efficiency. Additionally, this partnership
improves possibilities to finance further development at lower costs. That
might result in RAILUA bonds trading inside the sovereign curve in the
mid-term.