In an interview with Ukrainian transport media CFTS, deputy head of the parliamentary committee on economic development, Mr Dmytro Kysylevskyi, who co-authored the 2021 localisation law, voiced strong concerns. The legislation requires the share of locally-produced components in government procurement to rise by 5% annually, from 10% in 2022 to 40% by 2028.
Last month, national operator Ukrzaliznytsia (UZ) signed a contract with Alstom for the delivery of 55 Traxx Hauler freight locomotives, a new brand for Alstom’s Prima model range. All units are to be manufactured at Alstom’s Belfort plant in France. The use of Ukrainian-made components is only envisaged for maintenance and servicing.
Kysylevskyi described the lack of localisation as “a slap in the face of Ukrainian manufacturers”, arguing that local suppliers could have ensured a domestic content level above 50%. He said UZ should have prioritised localisation when preparing the tender documentation. “They should have structured the procurement in a way that made localisation possible. They are seeking budget support to cover operating costs, yet they have no right to send such large sums of foreign currency abroad, depriving Ukrainian companies of work”, he stated.
UZ’s director of office for international projects, Mr Volodymyr Shemayev, told CFTS that strict localisation requirements could not be applied because the contract is fully financed by international donors. He noted that while the current level of localisation is low, it is not zero, adding that the long-term goal is to achieve up to 60% localisation in maintenance activities.
It is worth recalling that the initial 2022 framework agreement between Alstom and UZ for 130 electric locomotives, which also involved external financing, envisaged 35% localisation. At the time, Shemayev said the production phase included around 5% local content, with the remaining 30% to be achieved through a 40-year maintenance programme. At the time of the procurement, the localisation terms were also criticised by the Federation of Employers of Ukraine, which argued that the requirement for domestic content in the rolling stock should have been set at 50%. In 2021, Mr Volodymyr Prykhodko, president of the Kryukiv Railway Car Building Works, one of Ukraine’s leading rolling stock manufacturers, also condemned what he described as the absence of a sovereign industrial policy in the country.
