Ukraine: investments in public transport system

Аналітика

Polish companies can participate in tenders for the modernization of rolling stock and bus fleet.  

Despite the ongoing war and spending more than 60% of its budget on defense, Ukraine is undertaking investment projects, trying to obtain international financing for it. An important element of these activities are initiatives aimed at improving mobility and supporting national and local public transport systems.

The Ukrainian railway monopoly "Ukrzaliznytsia" has just announced a tender for the purchase of 80 modern electric locomotives as part of the World Bank's project "Repairing Essential Logistics Infrastructure and Network Connectivity (RELINC)", implemented with the financial support of the European Bank for Reconstruction and Development. Applications for participation in the tender are accepted until July 22, 2024. The relevant order was published on the EBRD tender portal.

According to the terms of the competition, the potential supplier will propose two-system electric locomotives. In addition, he must commit to training Ukrainian personnel to operate the locomotives. The tender requirements also stipulate that the winner, in addition to the delivery of the locomotives, must create conditions in Ukraine for servicing and warranty repairs of the new traction rolling stock.

This tender may be an opportunity for expansion for large Polish companies from the railway industry, such as Newag or Pesa Bydgoszcz, which have extensive experience in the implementation of contracts on the international market.

However, the process of modernizing Ukrainian rolling stock is also an opportunity for smaller enterprises, which may be service providers or suppliers of spare parts. According to information from "Ukrzaliznytsia", in January-April 2024, the company repaired more than 7 thousand freight wagons, including 2 thousand wagons that underwent major repairs. In 2024, “Ukrzaliznytsia” plans to repair a total of 19 thousand freight wagons, such as coal wagons, tankers, cement ships, and special wagons.

Some transport infrastructure restoration projects are carried out by local authorities as part of measures to improve mobility and support local public transport systems.

According to data from Ukravtoprom, the Union of Automotive Companies of Ukraine, in the first quarter of 2024, Ukrainian entities, including local governments, imported 239 buses from abroad – 60 new and 179 used. Their total value amounted to over $12.1 million. Although Turkey was the largest supplier of new buses, the largest number of used buses were imported from Poland. In 2023, the Ukrainian bus fleet was enriched by 2770 buses, which is almost a one third more than in 2022.

Tenders in Ukraine are announced mainly on the Prozorro electronic platform. This platform includes both information on public procurement carried out by government and local government entities. Local governments often publish tender notices also on their official websites.

According to Deputy Prime Minister and Minister of Economy of Ukraine Yulia Svyrydenko, in 2023 the volume of orders carried out by the Prozorro system tripled compared to the previous year, reaching 480 billion hryvnias (about €11 billion). Currently, more than 80% of public procurement funds are spent through the Prozorro system.