Warsaw-Lviv Eurorail: What is known about the EUR-0.5-billion project

Ukraine wants to integrate into Europe with the help of railways. There are plans to build a railway with the European standard track gauge from Lviv to Warsaw. The prospects of the project are still unclear, but Chinese investors are ready to invest.
Mykola Zasiadko 11 May 2016 15:34

What do they want to build?

The Warsaw-Lviv Eurorail project provides for construction of tracks with a combined gauge of 1435/1520 mm on the Lviv-Przemysl railway segment. The total length is 67 kilometers. Construction of the tracks envisages the laying of four tracks and the appropriate sleepers. Back in 2008, the Lviv city council estimated the cost of the design work at EUR 6 million. In 2014, the Lviv Railway estimated that construction of the railway itself would cost more than EUR 460 million. Late last year, the Ukrainian Ministry of Infrastructure announced fresh details of the project. Then-Deputy Minister of Infrastructure Volodymyr Omelian said that a Chinese company was interested in investing in construction of high-speed railways on the Kyiv-Berlin and Kyiv-Odesa routes. Naturally, the railways will have a track gauge of 1435 millimeters while retaining the 1520-millimeter track gauge. Omelian reiterated this last week, although he again declined to name the Chinese company.

Why is a new railway needed?

The Warsaw-Lviv Eurorail project is a major project, which means that its implementation will help to solve a number of problems. Each of the participants in the project is pursuing its own goals. Poland intends to develop passenger transportation in its eastern provinces. According to Michal Grobelny, a Polish transport expert and deputy editor-in-chief of the Rynek Kolejowy magazine, there is a shortage of funding for development of railways in the eastern regions of Poland, and implementation of such projects could attract additional funds from the European Union. A large-scale project will be more interesting than reconstruction of a separate road segment in Poland. For Ukraine, the project is important for early and closer integration with the European Union. Extending standard-gauge railway tracks deep into Ukraine will allow creation of a major passenger hub on the way to/from Europe in in Lviv. In addition, it will be possible to create an inter-modal freight terminal in Lviv, similar to the one in Sławków (Poland).

The two countries also have the common goal of improving railway links. "The railway link between Poland and Ukraine is very weak and certainly does not meet passenger and freight needs," said Grobelny. Currently, trains only travel from to Poland from Kyiv and Lviv, and these trains consist of a locomotive and two wagons. The fare makes transportation by rail uncompetitive compared with transportation by air and road.

Which countries can join the project?

In addition to Ukraine and Poland, Romania may be interested in the project. For Bucharest, only extension of standard-gauge railway tracks to Chernivtsi and the national border is important. This will open a new transit corridor between the seaports in the Baltic Sea and the Black Sea. If one looks at a map, it becomes obvious that the route between Gdansk and Constanţa through Lviv and Chernivtsi is much shorter and easier than the current route through Slovakia and Hungary. Participation of Romania in the project will attract additional funds. However, this poses challenges for Ukraine. If standard-gauge railway tracks are extended to Chernivtsi, Ukrainian ports may lose part of their cargoes and the existence of the Viking container train will be called into question. For now, the border is saving Ukrainian ports because a train traveling on the proposed route will cross the Ukrainian border twice.

What could prevent implementation of the project?

The main problems regarding implementation of the project are harmonization of the interests of the participants and funding. So far, there are no problems regarding harmonization of the interests of the participants in the project, but the project itself is still in its infancy. The possibility of differences emerged as the project is developed cannot be ruled out. The issue of funding for the project is much more complicated. Ukraine needs to attract foreign investment. In a recent interview with the CFTS portal, the Ukrzaliznytsia public railway company’s newly appointed head Wojciech Balczun said: "There There is potential to obtain funds for this project from Western banks and the European Union… However, it is important to understand that for the European Union, it is important for Ukraine to first create the legal conditions for operation of Ukrzaliznytsia based on European standard (competitiveness on the market, free access to infrastructure, tariff policy, etc.)."

We note that the Ukraine’s Minister of Infrastructure Volodymyr Omelian recently announced talks with a Chinese company that is ready to invest in construction of standard-gauge railways. However, details of the proposed cooperation with this company and the name of the company were not disclosed.

What are the alternatives to the project?

There is an alternative to the Eurorail project – it involves extending the existing broad-gauge railway tracks to Poland. In the second half of 1970s, a railway branch was built from the Izov station to Slawkow. The latter is located not far from Katowice, and the nearby Olkusz station is located between two major airports in Kraków and Katowice. This means that this station could become a hub for Ukrainians wishing to fly from the Polish airports and Poles living near the railway. According to Grobelny, the LHS line can be used for passenger transportation, especially considering the fact that the relevant experience exists. In the 1990s, trains traveled from Moscow and Kharkov to the Olkusz station and there were also Lviv-Zamosc and Moscow-Zamosc trains. However, the spinoff of PKP LHS (the operator of the railway) into a separate company resulted in cessation of passenger transportation and focus on freight transportation. The company is now profitable, said Grobelny. In addition, the line has technical limitations that do not allow it to combine passenger and freight transportation. Most of the railway line is a single-track line with sidings at train stations.

Can the SUW-2000 replace the Eurorail project?

Another alternative to the Warsaw-Lviv Eurorail project is automatic gauge change. There are two such systems in Europe – the Talgo and the SUW-2000 variable-gauge systems. A Spanish company developed the first system. It was installed on the border of Belarus and Poland last year and Russian Railways trains traveling to the European Union now use it.

The Polish version, the SUW-2000 system, was developed by engineer Ryszard Suwalski. The SUW-2000 system was installed at the Mostyska station on the Ukrainian-Polish border in 2003, and a train with special bogies adapted for the SUW-2000 system was launched between Lviv and Krakow. However, the experiment has not been successful. Grobelny attributes its failure to a lack of political will, as well as to strong lobbying by companies engaged in cargo handling operations. "Dr. Ryszard Suwalski once said that reloading 1 ton of fuel from a tank car for a 1435-millimeter track gauge to a tank car for a 1520-millimeter track gauge will cost about USD 10. Each railway tank holds about 50 tons of liquid fuel. It is easy to calculate that the transfer of fuel from one tank car to another at the border costs about USD 500. If we multiply this by the number of tank cars in a single train, we can easily say that this is a huge business," Grobelny said.

In addition, the system has its drawbacks. One of them is the lack of certificates in the CIS and neighboring countries. Another problem, according to Grobelny, is that the only Polish manufacturer of SUW-2000 – ZNTK Poznan – is bankrupt. There is a third problem – rolling stock. Special wagons and locomotives are required to use the system, and this is an additional financial burden. "But there is still hope. The new Polish government has approved the so-called "Morawiecki plan," which is aimed at supporting Polish producers, among other things. Maybe they will take interest in development of the SUW-2000 system," he said.