Geographically Lucky

It is hard to overstate the importance of Ukraine's geographical situation. It is a large European country with an area of more than 603,000 km2, located on the crossing of most of the important European and Asian trade routes. It is traversed by a number of international transport corridors: Cretan 3, 5, 7, and 9; TRACECA, Baltic - Black Sea, Blacksea-economic Association, Europe - Asia. In addition, Ukraine has an advanced transport infrastructure, including all kinds of transport: rail, air, road, sea, and river; 1.3 billion tonnes of freight and 3.1 billion passengers are carried every year (not counting electric commuter trains). Efforts to develop a national system of transport corridors were stepped up in 1998 and over $370 million has since been invested.

Ukraine ranks with the continent's leaders for its transit potential. All this makes up for an attractive front, so to say, but people living in this country and using its transport every day are aware, of course, that the Ukrainian motorways are no match for the European ones, that our planes are obsolete, that railway service, even though made a little better of late, is far from ideal. Fortunately, the situation in the sphere of transport has been undergoing essential changes over the past couple of years. The Ministry of Transport is currently headed by Heorhy Kirpa, an energetic man learned in his field. At one time he succeeded in dragging the Ukrainian state railroad company out of the red. The Verkhovna Rada adopted the "Complex Program for the Development of Ukraine as a Transit State," to be completed in 2010. The national transport policy is aimed at technological modernisation and integration into the international transport system.

Being a transit state is very profitable. It means an influx of hard cash and hundreds of job placements. Most importantly, it eliminates the provincial atmosphere; the country is transferred from the side of the road of the world economy to its very centre. Whatever you may say, Ukraine is lucky to be where it is in Europe. Let us see how this country is taking advantage of this situation.

Roads: Age-Old Problem

Americans often say that their roads made them rich. They have a point there, for all those visiting the country always marvel at their highways. Foreign guests to Ukraine are shocked by the condition of our roads: portholes, bumpy and badly patched. Few motorways in Ukraine can be considered as even approaching the world standard. And this with everybody being fully aware that real economic growth is impossible without adequate motorways. A few statistics. Whereas in 1998 the state allocated $675 million for road construction and repair, in 2001-02 it was UAH 200 million. Motorway maintenance in Ukraine requires UAH 7.7 billion annually. Therefore current financing supplies only 14 % of the actual needs. The timeframe of major and mid-life road repair has been seriously transgressed in the past decades. Bridges constitute the highest risk factor, as most of these were built 40-50 years ago and their loading has been steadily increasing. Previously maximum motor vehicle weight was 15 t, now it ranges from 40 to 50 t. Repairing the bridges approaching a critical condition alone would cost UAH 1.5 billion. Experts believe that another year of such inadequate financing may result in a disastrous situation, and that then finding a way out will be extremely difficult.

Ukraine is lagging further behind even countries such as Russia and Belarus with each passing day. In Belarus, $5.5 thousand is spent on every kilometre of the roads, in Russia it is $9,000. In Germany, it is 20 times as much as in Ukraine.

Transport in retro style

Транспорт в стилі ретро

Researchers at the Road Transport University of Kharkiv estimate Ukraine's annual losses at UAH 20 billion because of inadequate roads. Most traffic stream from Europe to Russia bypasses Ukraine via Belarus with its excellent highway leading to Russia, so the carriers do not mind making a 1,500 km detour. In addition, 80% of the Ukrainian motor-car industry's service facilities have been closed down.

Ukrainian science matches the West in terms of research and development, but its technical and cadre potential does not, although experts believe there is hope for solving this problem. The construction of a highway bypassing Inkerman and leading to the Crimea was completed not so long ago. It had taken 12 years to build slightly more than 4 km and this year it took only 3.5 months to add a further 9 km, even though working under difficult conditions, but the result is a neat modern motorway.

Flying where?

One can board flights to 37 countries from Ukraine, ranging from Thailand to Russia. In the first nine months of 2002, the Ukrainian airlines carried 1,335,000 passengers, although during Soviet times air transport was used by 15 million people. Anyway, even in our best years air passengers in the West were three or four times those in Ukraine. In other words, we have never even tried to compete with other countries.

An interesting shift has been registered in recent years: the Ministry of Transport, aware that 80 % of passengers preferred foreign airlines, with the domestic air passenger market dying a slow death, decided on an experiment, making the prices of tickets on certain routes close to those of first class rail tickets. In the 92 days of the experiment, the air operators received an extra 100,000 passengers. 25 Ukrainian airlines specialise in international flights and 17 airports can accommodate their aircraft. Ukraine's largest air terminal Boryspil with its new 4,000-metre runway, can handle any aircraft, in any weather conditions. However, other Ukrainian airports have obsolete equipment. Because of excessive noise levels, the United States banned IL-62 flights, meaning that Ukrainian passengers have to board foreign flights to get to North America via Europe. Until recently the situation in Thailand was the same.

There are two options: to buy modern aircraft abroad or to develop Ukrainian models to match the international standard. It is also true, however, that there are seven or eight countries with a closed aircraft construction cycle, including Ukraine. Is it worth losing the aircraft industry? Aviation means long-term programmes, fresh employment opportunities, and science. The Ministry of Transport proclaimed 2003 the Year of Airports. Hope-inspiring news: Kyiv Airport in Zhuliany (in the capital's outskirts) will be renovated, thus becoming eligible for international status. For the time being, Boryspil is the only one with that status.

From the Varangians to the Greeks*

* It is a set phrase dating back centuries, denoting the merchant route across Kyiv Rus', stressing its vastness; currently also used colloquially to indicate a long - often unnecessarily so - tiresome journey.

Many want the ancient Silk Road revived, as it would promise Ukraine a great deal of profit. Few, however, point to yet another profitable direction: north-south. A very long time ago it was the legendary Road from the Varangians to the Greeks. Part of it was from the Baltic to the Black Sea, using the Daugava and Dnieper rivers. Today, the importance of this merchant route can be compared to the Suez and Panama canals. The Latvian Ministry of Transport proposed to Ukraine and Belarus to develop a navigable Daugava-Dnieper path. A promising project for Ukraine, because its part of the route is best prepared for exploitation. The idea of the transit route was discussed by the 46th session of the UN European Economic Commission's inland water transport committee. The project was included in the digest of the best 2002-03 investment projects of the Central European Initiative countries. Several large Western investment companies have already shown an interest and domestic investors seem determined to be part of it.

Rail Routes

Ukraine operates a railway network totalling over 22,000 km, including 1,531 stations. The network shows a stable performance, especially in recent years. Originally run down and inefficient, this industry has become profitable. A lot of passengers note a considerable improvement of service; there are 34 "company trains" and 69 electric and diesel locomotive trains offering better amenities; 38 passenger service centres at railway stations. And, of course, Ukraine's first Kyiv-Kharkiv express railway. Now people on short business trips to the former capital of Ukraine do not have to bother about overnight.

It does not mean that there are no problems with the Ukrainian railroads. Transportation Corridor #5 "East-West" (266 km of tracks plus 339 km of highways) could have accommodated 1.5-2 times more traffic than it does at present. The more so that the Ukrainian section of this route is electrified and controlled by modern equipment, answering practically all modern requirements except speed. The terrain is mountainous and the speed limit is 40-45 km/h. Besides, the one-lane hazardous tunnel on the Beskid-Skotarske span in the Lavochne-Chop sector of the Lviv Railroad Company does not make the situation any better. The tunnel is 1,747 m long and was built in 1886. It was destroyed during WW II and made operational again at the end of the 1940s. Its current speed limit is 15 km/h and the tunnel is in a 7-point earthquake risk area. Should anything happen to the tunnel, the whole transportation corridor would be out of service.

The central railway company Ukrzaliznytsia has prepared a renovation project for the Beskid tunnel. The investment issue remains to be settled and EBRD seems interested.

Another problem is the transfer from the narrow European to the broad Ukrainian gauge at the border. It takes time. Ukrainian experts are working on it; they propose to use extension axis carriages. Once this problem is solved, the border-crossing rate will increase.