An agreement has been reached on delivery of 40 new diesel locomotives manufactured by the General Electric company (United States) to Ukraine. The Ukrainian Railways joint-stock company (Ukrzaliznytsia) is expected to receive the first diesel locomotives in 2020.

Ukrzaliznytsia’s Board Chairman Yevhen Kravtsov announced this on December 30, the CFTS portal reports.

The relevant trilateral memorandum was signed by Wabtec (which now controls GE Transportation), Ukrzaliznytsia, and the Ukrainian Ministry of Infrastructure.

“Regarding localization of production, it should be 15% for the first locomotives,” Kravtsov said.

According to him, the 30 General Electric locomotives that were previously delivered now account for about 20% of all freight transport operations. “According to our estimates, we saved about UAH 100 million on fuel in 2019 thanks to GE locomotives alone,” he said.

“We signed a memorandum of understanding that provides for joint work by the parties to conclude contracts for delivery of 40 new locomotives of the TE33AC series by the General Electric Corporation in 2020 and provision of maintenance services for 70 these locomotives,” the Ministry of Infrastructure said on its website.

“Since March 2019, Ukrzaliznytsia has been in talks on maintenance of the locomotives that were previously supplied and the cost of the maintenance services... General Electric and its financial partners have now presented us with terms that we consider acceptable. We are finalizing agreement of these terms, after which preparation of the project documentation will begin. Another important point is expansion of localization of production in Ukraine. We are also negotiating about this," Ukraine’s Minister of Infrastructure Vladyslav Kryklyi said.

As the CFTS portal reported, in February 2018, the General Electric company (United States) and JSC Ukrzaliznytsia signed a framework agreement for supply of up to 225 General Electric locomotives of the Evolution Series to Ukraine by 2034. The first batch of 30 TE33AS locomotives has already been delivered to Ukraine. The cost of the first batch of 30 diesel locomotives is estimated at USD 140 million (including VAT). The locomotives were purchased through the Ukrainian Export-Import Bank (Ukreximbank) on financial leasing terms and with guarantees from City Bank (United States).

In February 2019, General Electric announced that it had completed the spinoff and merger of its transportation business with Wabtec Corporation. As a result of the deal, Wabtec shareholders own approximately 50.8% of Wabtec on a fully diluted basis and GE shareholders own approximately 24.3% of Wabtec on a fully diluted basis. GE owns common stock and non-voting convertible preferred stock, which together represent approximately a 24.9% economic interest in Wabtec on a fully diluted basis.