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22 May, 2013 16:35   ▪  

British economist: Ukraine definitely lost competitiveness because of its transport network

Ukraine is continuously losing its competitiveness and strives to get international loans for the infrastructure development, writes Bloomberg.

“Ukraine’s biggest transport companies are selling debt to revamp transport routes and win back cargoes from Russia, which has swiped a chunk of business from its neighbor by investing more in ports and inland links. State-owned railway monopoly Ukrzaliznytsya sold $500 million of five-year debt at a 9.5 percent yield last week as it gathers funds for 13.7 billion hryvnia ($1.7 billion) of car and track upgrades this year. Road operator Ukravtodor may sell about the same amount, according to Alexander Valchyshen, head of research at Investment Capital Ukraine in the capital, Kiev. Goods transit through Ukraine has plunged 39 percent since 2005 as shippers favored Russia over a nation that was once part of the Silk Road route and a fixture of Soviet-era commerce. While Russia plans to boost freight by a quarter by 2020, Ukraine must reverse a decade of under-spending to stem a loss of competitiveness, according to Maria Mikhaylenko, a principal at Roland Berger Strategy Consultants in Moscow,” Bloomberg notes.

“Although there have been reported investments, people haven’t really seen improvement on the ground,” Michelle Karavias, senior energy and infrastructure analyst at Business Monitor International, said this week by phone from London. “We’re bearish in our outlook for the road sector. Ukraine definitely lost competitiveness because of this transport network.”

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