BUSINESS IN BRIEF (11/14/99)

BUSINESS IN BRIEF

Kuchma issues decree on stock market

KYIV - President Leonid Kuchma issued a decree defining the main ways in which the stock market will be developed in the year 2000. The program's main points are further development of the stock market's infrastructure, introduction of a stock market monitoring system and stabilization of the treasury bills market, further development of the system of protecting investors' rights, development of the legislative base and enhancing public knowledge of the stock market. The Cabinet of Ministers and the State Commission for the Stock Market are responsible for implementing these measures. (Eastern Economist)

Daimler-Benz will renovate Boryspil Airport

KYIV - The Cabinet of Ministers issued an order to provide state guarantees for a German loan targeted at the reconstruction of the capital's international airport at Boryspil. The state must guarantee the repayment of 48.5 million DM to German banks. These funds are to be allocated to the second stage of the reconstruction of Boryspil International Airport, which will be conducted by the German company Daimler-Benz Aerospace AG. (Eastern Economist)

Ukrainian transport in need of funds

KYIV -The Ukrainian transportation system carried 211 million tons of cargo over nine months in 1999, which equals last year's amount, according to the Ministry of Transportation. In order to attract cargo flow to Ukraine, the ministry decreased tariffs by 40 percent for transportation of mineral fertilizer and tariffs for the transportation of cargo on transporters by 44 percent. The industry's major problem is non-payments by service users. Consumers owe 567 million hrv to Ukrainian railways. The main debtors are three ministries: Industrial Policy, Coal and Energy. Another problem is the lack of funds to renew transportation equipment. This year, 374 million passengers were carried by all modes of transportation. (Eastern Economist)

Antonov planes for sale via off-shore company

KYIV - Ukraine's Ministry of Transportation supports a proposal made by foreign investors to create an off-shore leasing company to sell Antonov planes at minimum prices and on lucrative terms. According to the ministry, foreign investors propose to leave Ukraine a 25-percent-plus-1-share stake in a new company and register the company in the off-shore zone. This will allow Ukraine to have a blocking stake sufficient to influence the company's policy and will at the same time provide enough protection for foreign investment without government guarantees, foreign investors say. According to investors, the new company must be granted exclusive rights to sell the aircraft and engines for a specified period of time. They also propose to create a state leasing fund in order to increase the competitiveness of Ukrainian airline companies on international markets and activate domestic markets. This fund would enable domestic airlines to buy Antonov planes at preferred rates and on long-term lease conditions via the proposed off-shore leasing company. The company would also be able to sell Ukrainian planes to those third world countries that cannot pay the full cost of the aircraft in advance. (Eastern Economist)

Ukraine negotiates AN-70 project

KYIV - Talks concerning the Ukrainian-Russian construction project of AN-70 planes began on November 3 in Germany. The talks were divided into two stages: work on the memorandum of cooperation, which is to be the legal basis for the project, and continuation of talks with German Airtruck GmbH consortium. The memorandum addresses issues connected to the protection of intellectual property, which is important for Ukraine, according to the vice minister for industrial policy, Valerii Kazakov. He added that the project is open to a fourth, fifth or sixth partner. Mr. Kazakov stated that the AN-70 project has several advantages, including the fact that if Germany joins the project, it would be able to purchase one-third more military-transport planes for the same price. Mr. Kazakov noted that the merger of German consortium Daimler Chrysler Aerospace with British-French concern Matra-Marconi Space, which took place last week, will influence the final decision by Germany. (Eastern Economist)

Danube will not be cleared before spring

BUDAPEST - The Hungarian Danube Navigation Committee has announced that it will not be possible to resume Danube navigation this winter since many fragments of ruined Yugoslav bridges cannot be removed from the river at present. The committee said that it would be possible to start clearing the river only next spring and the whole process would cost 15-30 million euros. At a meeting in Kyiv on September 22, the Ukrainian, Bulgarian and Romanian transport ministers signed an appeal to the European Union for financial assistance to enable navigation to be resumed by the end of the year. The ministers stated that the three countries are ready to provide experts and equipment for clearing a passage and reconstruction of bridges. According to Ukraine's Transport Ministry, as of September 1, Ukrainian companies' direct losses from the suspension of Danube traffic due to the war in Yugoslavia amounted to over $58 million (U.S.). According to the Transport Ministry, 96 merchant vessels belonging to the Danube Steamship Line are blocked on the upper Danube and 700 on the lower Danube. Meanwhile, Kiliya Shipyard has had to suspend construction of new ships ordered by German companies, and UkrRichFlot is unable to meet its commitments for transporting iron ore and slab from Ukrainian ports to the Yugoslav port of Smeredovo for that country's Sartyd steelworks. (Eastern Economist)

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