Republic of Ukraine Transport Sector Review
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ReportNo. 18636-UA Republicof Ukraine TransportSector Review Public Disclosure Authorized (In ThreeVolumes) Volume II: Technical Report November 30, 1998 Infrastructure Unit ExpertiseServices Europe and Central Asia DGI World Bank EuropeanCommission u Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Documentof theWorld Bank CURRENCY UNITS and EQUIVALENTS US$1 = Hrv 2.0 lHrv = 100 Kopeck US$1 = USc 100 WEIGHTS, MEASURES and OTHER UNITS Bln Billion Inh Inhabitant Kg Kilogram Km Kilometer Mln Million Pass Passenger pkm Passenger kilometer sq km, km2 Squarekilometer T Ton (meteric, 1,000 kg) Th Thousand tkm ton kilometer Toe Ton oil equivalent Vpd Vehicles per day CONVERSION FACTORS 1 mile = 1.609 meters I kg = 2.205 lbs i US gallon= 3.785 liters 1 sq km = 0.386 square miles CHEMICAL COMPOUNDS CxHy,HC Hydrocarbons CO Carbon Monoxide CO2 Carbon Dioxide NO, Nitrogen Oxides SO2 Sulfur Dioxide FISCAL YEAR January 1 - December 31 Vice President: Johannes Linn, ECAVP Country Director: Paul Siegelbaum, ECCl I Infrastructure Director Ricardo Halperin, ECSIN Sector Leader Eva Molnar, ECSIN Task Team Leader: Pedro Taborga, ECSIN GLOSSARY OF ACRONYMS AND ABBREVIATIONS ADW Average Dead Weight ATC Air Traffic Control BOT Build Operate &Transfer CAA Civil Aviation Administration CEFTA Central European Free Trade Agreement CIF Cost-Insurance-Freight CIS Commonwealth of Independent States CMEA Council for Mutual Economic Assistance COTIF Bern Convention of May 9, 1980 EBRD European Bank for Reconstruction and Development ECAC European Civil Aviation Conference EDI Electronic Data Interchanges EDP Electronic Data Processing EFF Extended Fund Facility EIA Environmental Impact Assessment EU European Union FIATA Federation Internationale des Associations des Transitaires et Assimiles (International Federation of Freight Forwarders and Related Services) FOB Free-On-Board FSU Former Soviet Union GAAP Generally Accepted Accounting Principles GATT General Agreement on Tariffs and Trade GDI Gross Domestic Investment GDP Gross Domestic Product GNP Gross National Product IATA International Air Transport Association IAS International Accounting Standards ICAO International Civil Aviation Organization IMF International Monetary Fund IRI International Roughness Index MOT Ministry of Transport - NBU National Bank of Ukraine OECD Organization for Economic Cooperation and Development PA Per Annum PIP Public Investment Plan SAC Structural Adjustment Credit SGS Societe Generale De Surveillance SMGS USSR Rail Waybill SOE State Organizations and Enterprises TACIS Technical Assistance for Commonwealth of Independent States TIR International Road Transport UZ Ukrzaliznytsia (Railway Administration) VAT Value Added Tax WTO World Trade Organization ACKNOWLEDGEMENTS The Review is based on findings of a World Bank mission, which visited Ukraine in May/June 1998, and a Transport Policy Workshop which followed it on June 29 - July 3, 1998. The members of the mission were P. N. Taborga (mission leader); Robert Bonney (Highway Specialist); Jean-Paul Desgranges (Aviation Specialist); Jan-Coen van Elburg (Environment Specialist); Parbo Juchnewitsch (Railway Reform Specialist); Rene Meeuws (Containerization Specialist); Philippe de Naurois (Senior Financial Analyst); Gerald Ollivier (Financial Analyst); Ovadia Salamna(Transport and Trade Facilitation); Olev Schults (Railway Specialist); Carlos Silva (Institutional Reform Expert); and Eugene Vernigora (Maritime and River Specialist). The Ministry of Transport and the Ukrainian National Agency for Development and Investment were the main counterparts of the mission on the Ukrainian side. The study has relied heavily on official sources of information and statistics as well as interviews and meetings with Government ministries and agencies. It also draws on on-going World Bank and IMF work on the macro-economic conditions of the country, other sector work, studies supported by EU, EU- TACIS and EBRD, cross country comparisons and other sector benchmarks. The mission gratefully acknowledges the suggestions received from Ms. Jann Masterson and Mr. Mark Davis, and the final updating of the report by Ms. Shobha Subramanian. Major sources of qualitative information were also obtained from the commercial services of France, the United Kingdom and the United States (Business Information Services for the NI',), located in Ukraine. The mission wishes to thank the EU - Expertise Service for its support, which financed consultant time, travel and subsistence, and some of the administrative costs of this work. Without this support, the work presented in this report would have not been possible. UKRAINE TRANSPORT SECTOR REVIEW Table of Contents 3 TRANSPORTSECTOR: ISSUES AND STRATEGY 3 1 Accounting and Financial Management Information Systems 4 TRANSPORTDEMAND AND FUTURESCENARIOS 4 1 ContainerGrowth Potential 4 2 Detailed Scenarilby Sub-sector 5 TILE NEW ROLE OF TlE GOVERNMENT 5 1 AdvisoryUnit Functions 6 TRANSPORTAND TRADEFACILITATION 6 1 Customs,Border Crossing and Documentation 6 2 Infrastructureand ServiceQuality Barriers 6 3 MultimodalTransport Measures 6 4 CorrectiveMeasures and Related Costs for ModalInefficiencies 6 5 Securityand InsuranceIssues 7 ROADINFRASTRUCTURE SECTOR 7 1 Road Infrastructure-CostRecovery Analysis 7 2 1 ForecastedStatistics 7 2 2 Proforma Sources& Uses of Funds 7 2 3 Main FinancialIndicators (Graph) 7 2 1 Forecasted Statistics 7 2 2 Proforma Sources& Uses of Funds 7 2 3 Main FinancialIndicators (Graph) 8 RAILWAYS 8 1 UZ OrganizationChart 8 2 UZAssets 8 3 UZ TrafficLevels and Importancein the Economy 8 4 RegionalRailways' Description 8 5 FinancialPerformances and Issues 8 1 1 RailwaySystem-Map 8 1 2 RailwayCorridor Map 8 1 3 Traffic Analysis(Railways Historical Data) 8 1 4 Graph: IndexedTraffic (TrendsBase 100=1990) 8 1 6 RegionalRailways Trafficand FinancialHighlights 1996 8 1 7 FinancialHighlights 8 1 8 1997-Balance Sheet -Railways 8 2 1 Traffic Estimates 8 2 2 Forecasted Statistics 8 2 3 ProFormaIncome Statements 8 2 4 ProformaSources & Uses of Funds 8 2 5 ProFormaBalance Sheets 8 2 6 ProFormaRatio Analysis 8 2 7 Main Financial Indicators(Graph) 8 2 1 Traffic Estimates 8 2 2 Forecasted Statistics 8 2 3 ProFormaIncome Statements 8 2 4 Proforma Sources& Uses of Funds 8 2 5 ProFormaBalance Sheets 8 2 6 ProFormaRatio Analysis 8 2 7 Main Financial Indicators(Graph) 8 2 8 GrossOperating Result (Graph) 8 2 9 InvestmentFinancing Capacity (Graph) 9 SEA PORTS 9 1 The Main Seaportsof Ukraine 9 2 Maritime Environmentunder FSU 9 1 1 Historicaltraffic per port- Export 9 1 2 Historicaltraffic per port- Import 9 1 3 Historicaltraffic per port- Transit 9 1 4 Historicaltraffic per port- Total 9 1 5 Traffic Analysis 9 1 6 IndexedTraffic (TrendsBase 100=1990) 9 1 7 Total Sea Ports Traffic 1997(Graph) 9 1 8 Financial AnalysisOdessa-Ilyichevsk 1997 9 2 1 Traffic Statistics 9 2 2 Forecasted Statistics 9 2 3 ProFormaIncome Statements 9 2 4 Profonna Sources& Uses of Funds 9 2 5 ProFormaBalance Sheets 9 2 6 ProFormaRatio Analysis 9 2 7 Main Financial Indicators(Graph) 9 2 1 Traffic Estimates 9 2 2 Forecasted Statistics 9 2 3 ProFormaIncome Statements 9 2 4 Proforma Sources& Uses of Funds 9 2 5 ProFormaBalance Sheets 9 2 6 ProFormaRatio Analysis 9 2 7 Main FinancialIndicators (Graph) 9 2 8 Gross OperatingResult (Graph) 9 2 9 InvestmentFinancing Capacity (Graph) 10 CIVILAVIATION 10 1 Air Ukraine 10 2 Condition of Main Airports 10 3 Technical Assistance Program 10 1 1 Main Ukrainian Airlines 10 1 2 Main Ukrainian Airlines-Freight Traffic 10 1 3 Main Ukrainian Airlines-Passenger Traffic 10 1 4 Ukrainian Airports-Passenger Traffic 10 1 5 Ukrainian Airports-Traffic Analysis and Graphs 10 1 6 Airports-Financial Comparisons- 1995 10 1 7 Borispol International Airport- Financial Highlights: 1996-1997 10 1 8 Borispol International Airport- Income Statements and Cash Flow: 1996-1997 10 2 2 Forecasted Statistics 10 2 3 ProForma Income Statements 10 2 4 ProForma Sources & Uses of Funds 10 2 5 ProFonna Balance Sheets 10 2 6 ProForma Ration Analysis 10 2 7 Main Financial Indicators (Graph) 10 2 2 Forecasted Statistics 10 2 3 ProFormnaIncome Statements 10 2 4 ProForma Sources & Uses of Funds 10 2 5 ProForma Balance Sheets 10 2 6 ProForma Ratio Analysis 10 2 7 Main Financial Indicators (Graph) 10 2 8 Gross Operating Result (Graph) 10 2 9 Investment Financing Capacity (Graph) 12 TRANSPORT SECTOR 12 1 1 Traffic Estimates-All Scenarios 12 1 2 Public Surplus in Transport Sector-All Scenarios 12 1 3 Trade Facilitation Expected Gross Economic Benefits- All Scenarios 12 2 1 Traffic Estimates all Modes 12 2 2 Traffic Estimates all Modes- Graphs 12 2 3 Gross operating Results 12 2 1 Traffic Estimates all Modes 12 2 2 Traffic Estimates all Modes-Graphs 12 2 3 Gross operating Results 12 2 1 Traffic Estimates all Modes 12 2 2 Traffic Estimates all Modes- Graphs 12 2 3 Gross Operating Results UKRAINE TRANSPORT SECTOR REVIEW Table of Contents 1. INTRODUCTION .................................................. 1 A. PURPOSEOF THE STUDY ................................................ I B. ORGANIZATIONOF THE STUDY ................................................ 2 C. CONTEXT..... ... ... ... ... .... ... ... ... ... .... ... ... ... ... 3 2. TRANSPORT AND ECONOMIC STABILIZATION ................................................. 5 A. STRUCTUREOF THEECONOMY ................................................. 5 B. MACRO-ECONOMICPERFORMANCE ................................................ 6 C. FOREIGNTRADE ...............................................