BUSINESS IN BRIEF (06/18/00)

BUSINESS IN BRIEF

Ukraine hopes to enter European space systems

KYIV - The National Space Agency of Ukraine asked the government to support a pilot project to integrate Ukraine's space navigation system into all-European systems, EGNOS and Galileo. NSAU has already started talks with the Space Agency of Italy and a number of Italian aviation/space companies which will focus on funding for the project. According to NSAU experts, Ukraine must join EGNOS and Galileo systems in order to obtain navigational information needed to run its international transport corridors. (Eastern Economist)

Millions lost in shadow electricity sales

KYIV - Some 150 million to 200 million hrv from the sale of electricity goes to the shadow sector monthly, according to Vice Prime Minister Yulia Tymoshenko. She added that this explains the resistance to energy sector reform by the top officials of the sector. (Eastern Economist)

10 percent of assets insured in Ukraine

KYIV - Only 10 percent of existing risk in Ukraine is insured, while in developed countries this figure is 90 to 95 percent, stated the president of the Ukrainian Center for Economic and Political Research, Anatol Hrytsenko. The insurance of property is 65 percent of the total, while health insurance is only 0.6 percent. (Eastern Economist)

Ernst & Young tapped as investment coordinator

KYIV - President Leonid Kuchma has authorized Ernst & Young to coordinate ties between foreign members of the advisory council for foreign investments in Ukraine. The council consists of the chairs of the companies that have made the largest investments in Ukraine's economy. Until now the coordinating role has been performed by Bohdan Mysko. (Eastern Economist)

Oschadnyi Bank starts home mortgages

KYIV - Oschadnyi Bank Vice-President Serhii Myshta has started the implementation of the OschchadZhytlo project, providing mortgages for individuals to purchase homes. A pilot project is being tested in Kyiv with a planned expansion to the national level. Additionally, Oschadnyi Bank and its subsidiary, OshchadMarket, have announced the introduction of a new service, the sale of goods from a catalogue. The catalogue will be distributed through the over 10,000 Oschadnyi Bank branches. (Eastern Economist)

Gas well begins production in Poltava Oblast

POLTAVA - A new gas well has begun production in the Poltava Oblast. The well is 4,800 meters deep and is capable of producing 800,000 cubic meters of gas per day. The director of PoltavaGazoVydobuvannia, Volodymyr Artemov, said that this is the most productive well in the region for the last 15 years. Currently there are 400 well sites in the Poltava Oblast, which produced over 5 billion cubic meters of gas in 1999. The new site alone is expected to bring in an additional 300 million cubic meters of gas in 2000. (Eastern Economist)

Oreanda Hotel first for renovation

SYMFEROPOL - The first investment project to be carried out in the Greater Yalta Priority Development Zone will be the renovation of the Oreanda, one of the most fashionable hotels in the city, said Yalta Mayor Volodymyr Marchenko. According to Mr. Marchenko, Iventa of Switzerland will invest $5.6 million (U.S.) in the hotel renovation, which will give it a 60 percent stake, the State Property Fund of Crimea, 36 percent; and the Yalta community, 4 percent. The Oreanda project will include a large-scale renovation of all the buildings, construction of a new building, park, parking lot, swimming pool and development of beach infrastructure. Oreanda will become a four-star hotel, according to the international classification system. The project is expected to show a profit in six years. (Eastern Economist)

Antonov and Air Launch sign agreement

KYIV - The Antonov aviation complex and Ukrainian-Russian Air Launch complex have signed an agreement, according to which Antonov will assist in launches of telecommunication, navigation and meteorology satellites up to 3.5 tons in weight into low orbits. AN-124-100 Ruslan aircraft will be used as the launch platform, taking the satellite and the booster to the optimal launch point and launching it from a height of 10 kilometers. Antonov will develop the system for loading and launching the booster. The first commercial launch is planned for 2003. (Eastern Economist)

National airline plans to fly AN-140s

KYIV - The National Airlines of Ukraine plans to receive the first AN-140 aircraft by the end of the summer, according to the airline's president, Mykola Plaksii, who spoke at a ceremony for certification of the AN-140. The airline is in talks with Kharkiv Aircraft Plant to lease two AN-140 for five years. The price of one aircraft is approximately $8 million to $10 million (U.S.). The president of Aerosweet airlines, Hryhorii Hurtovii, commented that the bigger issue than the price of the aircraft is its operating costs. "If the manufacturer offers a good price Aerosweet will soon also use the AN-140," stated Mr. Hurtovii. (Eastern Economist)

Ikar begins flights of AN-140s in June

KYIV - AN-140 aircraft will begin regular service on the routes of Ikar airways in June, said Ikar Assistant General Director Yulii Kyseliov. According to the contract Kharkiv Aviation Plant will supply five AN-140s to Ikar. The purchase was financed by a loan from Va-Bank. The size of the contract was not disclosed, but Mr. Kyseliov stated that the price of one aircraft was not higher than $8 million. (Eastern Economist)

AN-140 production waiting for buyers

KHARKIV - The main problem for the producers of the new AN-140 aircraft is financing production since airlines of the Commonwealth of Independent States have a low ability to pay, stated Mykhailo Ternov, deputy general director of the Kharkiv Aviation Plant.

Kyiv receives World Bank loan of $18.2 M

KYIV -The World Bank and the Kyiv City Administration have signed an agreement for allocation of a loan for $18.2 million (U.S.) to be directed toward energy conservation. The document was signed by Deputy Mayor Viktor Padalka in Washington. The loan is allocated for this project under extremely attractive conditions to the city, according to the head of the Kyiv's Foreign Economic Relations Department, Mykhailo Pozhyvanov. (Eastern Economist)

50 percent of Bukovyna airline for sale

KYIV - The State Property Fund has approved the cash sale by tender of a 50 percent stake in Bukovyna Airlines. The stake's starting price is 1,036,000 hrv. The successful bid will be requested to pay the airline's 150,000 hrv debt, keep the airline's main operations and maintain aircraft. (Eastern Economist)

Insurance industry holds roundtable

KYIV - A roundtable on insurance business in Ukraine was held March 31 by the League of Insurance Organizations of Ukraine and the Institute for the Transformation of Society. The problems included the deficiencies in existing legislation, state influence on private insurance companies, the necessity of introducing new regulations and hurdles to the development of social insurance systems. Many participants complained that the state does not consider insurance companies as potential investors. As of January, 263 insurance companies were operating in Ukraine, earning 1.164 billion hrv in 1999. (Eastern Economist)

President at opening of Cargill plant

DONETSK - President Leonid Kuchma attended the opening of the new Cargill sunflower seed-processing plant in Donetsk on April 4. The president of Cargill Ukraine, Patrick Bracken, said the company will pay cash for sunflower seeds and the oil will be sold on both domestic and international markets with distribution through Cargill's international network. The plant was constructed over two years at cost of over $50 million (U.S.). The new plant is capable of processing 300,000 tons of sunflower seed annually and provides 400 direct and indirect jobs. (Eastern Economist)

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