The European Bank for Reconstruction and Development and the Ukrainian Railways joint-stock company (JSC Ukrzaliznytsia) intend to invite tenders for supply of materials for railways in the Trans-European Transport Network (TEN-T). In addition, goods and services for upgrade of railway automation and communications equipment will be purchased via the tender.
This was announced by Ukrzaliznytsia’s Board Chairman Yevhen Kravtsov, the CFTS portal reports.
According to Kravtsov, materials worth a total of USD 100 million will be purchased in accordance with EBRD rules, which will guarantee maximum transparency of the process.
In accordance with the framework agreement that Ukrzaliznytsia and the EBRD signed in September 2019, 70% of the funds will be used to finance rehabilitation of Ukraine’s railway infrastructure on the TEN-T corridors within Ukraine. In particular, these funds are expected to be spent on elements of the upper structure of rail-track tracks, including fasteners.
The tender will be held in accordance with the EBRD’s transparent rules, using the EBRD’s Client E-Procurement Portal (ECEPP). Participants in the tender can be residents of Ukraine or non-residents.
"Ukrzaliznytsia is hoping that this will allow involvement of a wide range of participants in the procurement process, exclude monopolies from supply of individual product ranges, and eliminate collusion among bidders," Ukrzaliznytsia said.
The remaining 30% will be used to upgrade signalling and communications equipment, as well as to improve the railway traffic system. Ukrzaliznytsia itself will perform all the work in the period of 2020-2021.
Approximately 80% of all transit cargoes pass through the railway tracks of the TEN-T transport corridors. Ukrzaliznytsia estimates that these measures will enable the company to attract additional transit cargoes, reduce the period of cargo transit through Ukraine, and increase the company's revenue.
As reported earlier, the Eurobonds that Ukrzaliznytsia issued in July this year have been permitted to trade on the Ukrainian stock market.
JSC Ukrzaliznytsia recently issued Eurobonds for USD 500 million at the yield rate of 8.25% per annum.
After the placement of Eurobonds, the Standard & Poor's (S&P) international credit rating agency raised JSC Ukrzaliznytsia’s credit rating from CCC+ to B- with a stable Outlook (its credit rating is constrained by Ukraine’s sovereign credit rating).