10 October 2011
Ukrainian state railway monopoly Ukrzaliznytsya (UZ) postponed negotiations with Transmashholding (TMH, Russia), which controls Luhanskteplovoz (UX: LTPL UK, BUY) on a USD 1 bln order for 292 electric locomotives, Interfax reported on Friday. UZ claimed TMH planned to produce only 10% of units locally and increased average prices by 8%. According to separate media reports, UZ recently began talks with Russia’s Sinara and its Chinese supplier for SS4 locomotives, which promised 40% of production would be done locally and financing for the order, respectively. Vitaly Gorovoy: We expect TMH has the highest chance to win the order from UZ, because Luhanskteplovoz is historically the largest supplier to UZ. We view the announcement as an attempt by UZ management to secure better contract terms.