UZ Acting Chief Views Renovation of Rolling Stock as Priority, Plans to Split UZ.

At yesterday’s press-conference of Volodymyr Kozak, acting CEO of Ukrzaliznytsya, announced his view on the company’s development. Kozak is against several plans put forward by his predecessor, including high-speed railway transportation, and announced his intention to concentrate on the renovation of UZ’s rolling stock. Kozak said that out of the 65 ths freight gondola carriages, used by UZ presently as major railway freight transportation mean, 24 ths have surpassed their expected working lifetimes. According to Kozak UZ needs to buy 5 ths new gondola carriages annually (roughly double the 2.8 ths, ordered in 2006 – all from Kryukivsky Carriage Building), and 6.8 ths out of the country’s 20 ths km of rails require repairs including the replacement of 7 ths railway switches (2.8 times over production of Dnipropetrovsky Switch (DSTR: BUY), Ukraine’s only railway switch producer in 2005). Kozak also contradicted a recent statement by Transport minister Mykola Rudkovsky, who had come out against turning UZ into JSC with a long-term possibility for privatization. Kozak plans to create two JSC, separating freight and passenger transportation, and finance the former only, as it brings in the majority (88%) of UZ revenues. Olha Pankiv: Kozak’s plans are in line with the Russian model for railway development. In the long term we expect the separation of daughter companies and the sale of non-controlling stakes to private investors with control remaining in state hands.