The Ukrainian Railways joint-stock company (Ukrzaliznytsia) has been unable to obtain funds from the European Union's Connecting Europe Facility (CEF) grant program to finance the construction of the Mostyska-Sknyliv section of the European standard gauge (1435 mm) railway from the Polish border to Lviv.

Ukrzaliznytsia’s Board Chairman Yevhen Liaschenko announced this on the sidelines of the “Made in Ukraine” forum, the CFTS portal reports, citing the Interfax Ukraine news agency.

"As for Mostyska-Sknyliv, we are ready. We are in the starting blocks, we have the project design documentation ready, and everything is ready for this. However, the CEF … have not confirmed their intention to finance Mostyska-Sknyliv," Liaschenko said.

Regarding the alternative source of funds for this project, he said: "We have found... We have already signed 50% of the project with USAID. They have confirmed the allocation of funds but have taken additional time to review the project design documentation. They are currently reviewing it. Our teams have been in close contact for about a month and a half."

As previously reported, Ukrzaliznytsia announced in the summer of 2023 that the European Union would invest in the development of Ukraine's railway infrastructure. Specifically, it said that the European Union would provide funding for the development of border crossings with Poland, Romania, the Slovak Republic, and Hungary under the Connecting Europe Facility (CEF) grant program.

The CEF is a fund set up by the European Union in 2014 to invest in transport, energy, digital, and telecommunications projects. It is the principal instrument for financing the development of the Trans-European Transport Network (TEN-T).

In December 2023, the United States Agency for International Development (USAID) and Ukrzaliznytsia signed a memorandum of understanding to help upgrade the railway segment from the Mostyska station on the border with Poland to the Sknyliv station in Lviv.

According to a USAID statement, the partnership between USAID and Ukrzaliznytsia will result in a total of USD 225 million in funding for this railway segment.

Recently, Ukraine’s Deputy Prime Minister for Reconstruction and Minister of Development of Communities, Territories, and Infrastructure Oleksandr Kubrakov said that construction of the European-gauge Mostyska-Lviv railway would begin in 2024.

On 27 February, the Ministry of Development of Communities, Territories, and Infrastructure said that Ukrzaliznytsia expects to learn in June 2024 the results of the competition for projects of the CEF, which should approve more than EUR 80 million in funding for the development of railway crossings on the borders with the European Union. These projects include the preparation of a strategy for the development of European standard gauge tracks (1435 mm wide) for the Lviv railway junction.

"The proposal refers to the preparation for the implementation of a project for the development of the Lviv railway junction, taking into account the prospects for the expansion of the 1435 mm gauge railway network of the Trans-European Transport Network (TEN-T) in Ukraine. The planned duration of the project is 2024-2027," the ministry said.