UKRINFORM NEWS AGENCY

  NEWS FROM UKRAINE

On Friday, January 28 President Viktor Yuschenko arrived in Davos, Switzerland to participate in the World Economic Forum there.

Viktor Yuschenko held a meeting with ex-President Bill Clinton of the USA, which chiefly dealt with investment-related matters and humanitarian problems, the Ukrainian presidential press service told Ukrinform.

President Yuschenko stated Ukraine as one of Europe's most promising markets and called upon Ukraine's friends to come to the Ukrainian market.

As he told Mr Clinton, Ukraine's new authority pledges to create common rules of the game for entrepreneurs and businesses and better Ukraine's investment environments.

In turn, Bill Clinton noted that his Foundation for Combating HIV/AIDS, TB and Malaria is ready to cooperate with Ukraine in fighting these diseases.

Mr Clinton congratulated Viktor Yuschenko on the latter's convincing victory in the presidential elections.

***

As the presidential press service told Ukrinform, President Viktor Yuschenko, who arrived in Davos on Friday, met with Microsoft Board Chairperson Bill Gates.

The meeting focused on changes in Ukraine's investment climate.

As President Yuschenko reassured his interlocutor, changes in Ukraine will soon become obvious to foreign investors.

In turn, Bill Gates noted the Ukrainian people's high intellectual potential and stated the Microsoft company's readiness to expand its representation to Ukraine and support educational programs for Ukrainian youth.

***

Problems relating to Ukraine's drive for joining the World Trade Organisation were discussed by President Viktor Yuschenko and WTO Director General Supachai Panitchpakdi in Davos on Friday, January 28.

According to the presidential press service, the meeting was attended, on Ukraine's side, by NBU Governor Volodymyr Stelmakh and VR deputy Oleh Rybachuk.

Mr Yuschenko was reported to have articulated his hope that by 2005's close Ukraine will become a full-fledged WTO member.

As President Yuschenko told his interlocutor, in the new Ukrainian Government there will be a vice minister in charge of Ukraine's Eurointegration, who will also be responsible for Ukraine's accedence to the WTO.

He stated Oleh Rybachuk as a likely candidate for this post.

In turn, Supachai Panitchpakdi stated support for Ukraine's accedence to the WTO and invited the Ukrainian party to make a visit to the WTO Head Office in Geneva as soon as Ukraine's new government has been formed.

***

As the presidential press service told Ukrinform, on Friday President Viktor Yuschenko met in Davos with German Chancellor Gerhard Schroeder.

The parties discussed bilateral political, trade-economic relations and matters of Ukraine's Eurointegration.

They reached an agreement on forming a mixed Ukrainian-German working group to vet problems of Ukraine's accidence to the WTO and granting Ukraine the market economy nation status.

Gerhard Schroeder and Viktor Yuschenko also reached an agreement on German Foreign Minister Joschka Fischer's visit to be shortly made to Ukraine.

Gerhard Schroeder invited the Ukrainian President to visit Germany in March.

The two leaders' meeting lasted about half an hour.

***

 Drawing investments in Ukraine was the major topic, which President Viktor Yuschenko and EBRD President Jean Lemier discussed during their Friday meeting in Davos, Switzerland, and presidential press service in Kyiv told Ukrinform.

As Jean Lemier said, the world hopes that Ukraine will carry on reforms, and the EBRD will be ready to muster up to one billion euro investments in Ukraine on the yearly basis.

The Ukrainian President stated the Ukrainian economy's liberalization and improvements in investment environments as the new Ukrainian authority's topmost priority.

We ill do this for the sake of improving the Ukrainian people's living standards, President Yuschenko noted, and we don't intend to footdrag on this.

***

On Friday, January 28 President Viktor Yuschenko suggested Yulia Tymoshenko's candidature for premiership to the Verkhovna Rada of Ukraine.

The Head of State appointed Mrs Tymoshenko acting Prime Minister on January 24.

Mrs Tymoshenko will need support of 226 deputies out of the 450 to assume the office.

Yulia Tymoshenko's endorsement is expected to be addressed by the Parliament next week during a session, which will open on February 1.

***

On Thursday President Viktor Yuschenko participated in commemorative ceremonies on the occasion of the 60th anniversary of liberation of Nazi extermination camp Oswiencim inmates. Mr Yuschenko lit a candle at the Monument's Ukrainian segment.

***

Acting Minister of Foreign Affairs Kostiantyn Hryschenko has sent a message of congratulations to his American counterpart, Condoleezza Rice on the occasion of her endorsement in the office of US Secretary of State.

The message states Ms Rice's appointment to the post as very important, in view of the international community facing hard times.

I am sure, Mr Hryschenko's message says, that your experience, professionalism and knowledge will be of great use not only to the USA, but also the entire world.

The Ukrainian Foreign Minister stated his conviction that, with the elections over in Ukraine and the USA, a new page will open in bilateral relations between the two countries.

The Ukrainian Foreign Minister also stated his conviction that the newly appointed State Secretary's friendly and constructive manner, in which she addressed problems of Ukrainian-American relations, gives ample ground to believe that in her person Ukraine will have a good and reliable friend.

Mr Hryschenko wished Condoleezza Rice every success in her activities and wished the American people prosperity and peace.

***

A message of greetings and congratulations has reached the Ukrainian Foreign Ministry, sent by President Alvaro Uribe Velez of Colombia to President Viktor Yuschenko on the occasion of the latter's election.

The message states Colombia's readiness to promote friendly relations with Ukraine.

***

A message of greetings and congratulations has reached the Ukrainian Ministry of Foreign Affairs, sent to Viktor Yuschenko by UNESCO Director General Koichiro Matsuura on the occasion of Mr Yuschenko's election President of Ukraine.

***

A message of greetings and congratulations has come to the Ukrainian Foreign Ministry, sent to Viktor Yuschenko by New York City Council Speaker Gifford Miller on the occasion of Mr Yuschenko's election President of Ukraine.

***

The Ukrainian Institute of America in NYC was the venue of a meeting of international observers to the presidential elections in Ukraine, which was sponsored by the Ukrainian Congress Committee of America (UCCA) and the Ukrainian Consulate General in New York City.

The meeting was attended, among others, by Askold Lozynskyj, president of the World Congress of Ukrainians, Michael Sawkiw, president of the UCCA, Ukraine's Permanent Representative to UN Valeri Kuchynsky, Ukrainian Consul General Sergei Pogoreltsev.

***

According to Borys Olijnyk, Head of the Verkhovna Rada Permanent Delegation to the PACE, the PACE's latest session, which drew to a close on Friday, January 28, was very positive for Ukraine.

Borys Olijnyk thus commented on impressions, which President Viktor Yuschenko's visit to Strasbourg and his speech at the PACE session have left.

The several past months' developments in Ukraine, Borys Olijnyk noted, have shown the world that Ukraine has really embarked on a new life.

This time, he said, the VR Delegation to the PACE, though composed of members of different political parties, demonstrated their unity, which we world like to see within the Ukrainian society.

He pointed to the fact that it was high-ranking officials of the EuroCouncil and the PACE who spoke favorably about Ukraine and its President, rather than members of the Ukrainian delegation.

We were pleased to feel ourselves Ukrainians and see our leader being hailed like no one else, Borys Olijnyk said.

As he noted, speeches by the newly elected PACE President Rene van der Linden and EuroCouncil Secretary General Terry Davis, which were delivered at the PACE session, began with sentences about Ukraine and its President.

As Borys Olijnyk stressed, Viktor Yuschenko succeeded in dispelling many myths. Even opponents of the new Ukrainian authority appraised Viktor Yuschenko as a prudent politician, and the number of his supporters in Europe has increased.

***

Speaking in an interview to the Frankfurt Allgemeine, Bundestag deputy, vice chairman of the Christian-Democratic and Christian-Social Unions faction Wolfgang Schaeuble said the European Union must not leave Ukraine alone vis-a-vis its problems.

So far, he said, the EU's statements about Ukraine's Eurointegration prospects have been rather restrained.

Such a stand, considering Turkey's prospects for joining the EU, humiliates the EU.

Unlike Turkey and Russia, Ukraine shares Europe's history and culture, the German politician stressed.

In his opinion, the EU must be ready to admit Ukraine to European institutes as soon as Ukraine attains the principles of democracy, becomes a law-abiding state and a market economy nation.

***

A declaration was circulated in Brussels by Luxembourg's EU chairmanship, which hails Ukraine's initiative toward Transdniestrian regulation during the Ukrainian party-initiated consultations in Odesa on January 25 and 26.

***

Acting Prime Minister Yulia Tymoshenko held a telephone conversation with Prime Minister Zurab Zhvania of Georgia.

Mrs Tymoshenko voiced her deep gratitude to the people, President, Parliament and Government of Georgia for their resolute support of Ukraine's democratic forces during the presidential elections.

The Heads of Government agreed to transform the positive emotional upsurge in bilateral relations between Ukraine and Georgia into practical deeds.

In view of holding the Year of Georgia in Ukraine, they decided to shortly convene the 5th Session of the mixed Intergovernmental Commission for economic cooperation in the Ukrainian capital, which the Prime Ministers will co-chair.

***

On Thursday the Kyiv City Rada resolved to suspend allotting land plots in the capital's suburb Puscha-Vodytsia.

Commenting on the City Rada's resolution, which repealed earlier decisions, Mykola Tomenko, chairman of the Verkhovna Rada Committee for freedom of expression and the press, referred to it as a great victory of the public and the media.

According to Mr Tomenko, the Kyiv City Rada's previous resolutions, thus revoked, virtually granted free of charge, at least 736 ha of land plots in the Puscha-Vodytsia sanctuary zone to Kyiv City Rada deputies, members of the Central Electoral Commission, the Constitutional Court, government members and Verkhovna Rada deputies.

As Mykola Tomenko disclosed, he has initiated a VR resolution to set up an ad hoc fact-finding commission to investigate into this matter.

In his opinion, the Kyiv City-Hall's explanations about its decisions having been passed under duress on the part of high-ranking officials, including the then, president, Leonid Kuchma, appear rather queer.

Really, did Leonid Kuchma bring pressure to bear on (Kyiv mayor) Oleksandr Omelchenko and the Kyiv City Rada when decisions were made to allot prestigious territories to Mr Omelchenko's deputies or members of the Kyiv City Rada' Mr Tomenko wondered.

Incidentally, he noted, the list of officials who got such "land gifts" has not been made public, yet.

He also pointed to the fact that high-ranking functionaries of political parties, which have declared themselves as the "new opposition," such as Raisa Bogatyreva, Nestor Shufrych, Stepan Havrysh have not returned their land plots in Puscha-Vodytsia, which had been granted to them by the Kyiv City Rada.

***

On Thursday, January 27 the Kharkiv Regional Rada's tumultuous eight-hour-long session, which caused the deputies' split, passed a resolution to accept the regional prosecutor's protest with regard to former governor Yevgeni Kushnarev's election the Kharkiv Regional Rada's chairperson.

The session was chaired by Kushnarev's deputy Oleksi Kolesnyk, though Yevgeni Kushnarev took a seat in the presidium.

The session adopted another resolution to accept the prosecutor's protest with regard to establishment of the Regional Rada's Agency for management of communal property.

As a matter of fact, Yevgeni Kushnarev orchestrated his election Regional Rada chairperson before he submitted his resignation as the Kharkiv Regional Administration's head and thus combined the two posts, which runs counter to Ukraine's active legislation.

***

In compliance with the Cabinet's resolution # 17-r of January 21, 2005, the Finance Ministry has remitted 250,000 UAH to the Ministry of Foreign Affairs, meant for humanitarian aid to  juveniles in earthquake-tsunami-afflicted South East Asian countries.

***

As prosecutor general Sviatoslav Piskun told journalists in Kyiv on Friday, the PGO intends to carry out an additional expertise of Viktor Yuschenko's poisoning.

On February 7, he said, he will meet with Austrian prosecutors and judicial officers. According to Sviatoslav Piskun, the PGO is working on several versions of Mr Yuschenko's poisoning.

***

As prosecutor general Sviatoslav Piskun told mediapeople in Kyiv on Friday, the PGO tends to believe that transportation & communication minister Georgi Kirpa committed a suicide, though many forensic steps are still ahead.

Earlier, the PGO instituted legal proceedings under Article 130 of the Criminal Code (driving a person to a suicide).

***

According to prosecutor general Sviatoslav Piskun, the criminal cases against Yulia Tymoshenko, her spouse and former senior officers of the corporation Integral Energy Systems of Ukraine have been cancelled, in view of lacking corpus delicti.

As Sviatoslav Piskun noted, he has got a message from the US Justice Department, which says that Mrs Tymoshenko has been acquitted of all the charges.

Commenting on legal proceedings, instituted against Yulia Tymoshenko by the Russian Military Prosecutor Office, Sviatoslav Piskun said actually the charges of misuse of authority were brought against Russian Defense Ministry officials, one of whom "mentioned Yulia Tymoshenko's name."

***

By January's close the Prosecutor General Office will send 42 criminal cases against election fraud masterminds to court, prosecutor general Sviatoslav Piskun told journalists in Kyiv Friday.

As he said, investigations have been completed into 36 cases, though as many as almost 160 such cases are being investigated.

In accordance with Ukraine's active legislation, such cases' investigations should be completed within two months.

***

In investigating the journalist Georgi Gongadze murder case one more international expertise will be carried out, prosecutor general Sviatoslav Piskun told journalists in Kyiv on Friday.

As he said, he had a three-hour talk with the late journalist's mother, who requested an expertise to guarantee the body's identification.

To this end, he said, the journalist's mother has agreed to provide forensic experts with some of her son's personal belongings.

The expertise, Sviatoslav Piskun went on, will likely be performed in Germany or Switzerland and will involve journalists with the "Reporters Sens Frontiers."

As he noted, he held talks with the German and US Ambassadors to Ukraine, who promised their support in performing the expertise.

The expertise, Sviatoslav Piskun disclosed, will be appointed next week and won't last long.

***

The EuroCommission has launched nine new transborder cooperation programs, two of which involve Ukraine.

EuroCommissioner for regional policies Danata Hubner presented the programs at an international seminar in Warsaw, Poland, which was held on January 27 and which was attended by government officials from EU member- and neighbor-nations.

The programs are meant for a vast region, where 57 million people live, and are viewed as important for implementing the EU's neighborhood policy, which is aimed at promotion of economic, social, territorial transborder cooperation and contacts.

The EU's  budget provides for allocating 260 million euros, the bulk of which, 21.5 M. euros, will be paid through funds of the INTERREG transborder initiative.

The renlainer will come from other financial instruments, meant for EU candidate-nations and other countries.

Besides, additional 76 M. euros will come from national and regional sources.

The EuroCommission's programs are chiefly meant for improving economic and social standards of the region's nations and assisting them in dealing with their problems.

The two Ukraine-related programs are the Poland-Belarus-Ukraine Neighborhood Program and the Hungary-Slovakia-Ukraine Neighborhood Program.

The former provides for promoting partnership among Poland's Lubelskie, Podkarpackie Provinces, Ostroleka-Sidlez subregion, Belarus's Grodno, Brest Provinces, eastern territories of Minsk Province and Ukraine's Volyn, Lviv and Transcarpathian regions.

The program covers a vast territory with 13.9 million inhabitants.

Its major objectives are raising the regional economies' competitiveness, modernization of communication lines, creation of natural environmental protection systems, development of human resources.

To this end 37.8 M. euros will be allocated from resources of the European Regional Policy and 7.9 M. euros from the TACIS program's funds.

The latter program will involve about 11  million residents of transborder territories and will pursue goals, which are identical to the former's objectives.

Its implementation will be financed to the tune of 23.8 M. euros, of which 23 M. euros will come from funds of the European Regional Policy and four million euros will come from resources of the TACIS program for Ukraine.

The rest of the EuroCommission's new programs involve the Czech Republic and Poland (34.5 M. euros), Poland and Slovakia (20 M. euros), Slovakia and the Czech Republic (13.7 M. euros), Lithuania, Poland and Russia's Kaliningrad Province (36.5 M. euros from the European Region Policy's funds and 9.5 M. euros from the TACIS program for Kaliningrad Province), Hungary and Romania (42 M. euros), Italy and Malta (5.1 M. euros), Estonia, Latvia and Russia, Latvia, Lithuania and Belarus (27 M. euros).

***

In early 2005 the Armed Forces of Ukraine shifted to a three-service structure through merging the Air Force and the Air Defense, So, now the Armed Forces consist of the Army, the Navy and the Air Force.

Forming the new Air Force is viewed by Ukrainian brass hats as an important element in the process of trimming the Armed Forces, which provides for making them greatly leaner and more combative.

 With the merger process nearing completion, the new Air Force's units are gearing up for testing their compatibility and combativity, which process will consummate in a joint exercise in August 2005.

According to Ukrainian military experts, introduction of the Oreadna-M automated 3C system (command, control, communication), which Ukrainian researchers have developed, will secure compatibility of the traditional Air Force with its new air defense component.

This system is expected to cover the entire Air Force.

As Ukrainian military experts predict, by 2015 the new Air Force will become the Ukrainian Armed Forces' most mobile, technologically most advanced service, which will be composed of its Main Headquarters, and six aviation brigades, including two brigades of interceptions, one brigade of bombers and recce aircraft, one brigade of assault aircraft, two units of transport planes, five SAM units, four radiotechnical regiments, as well as logistical units.

The Air Force's personnel will be 20,000- to 23,000-strong, including between 18,000 and 20,000 military servicemen.

The Air Force will be equipped with about 120 combat aircraft, 50 to 60 transport and training planes.

By 2015 the Air Force's transport aviation will shift to AN-70 planes.

In the Ukrainian military experts' opinion, Ukrainian aircraft designers' effort should focus on developing versatile, multipurpose aircraft, extending their range, equipping combat planes with high-precision, great-punch, long-range weapons, including AAMs and ASMs, improving SAM systems.

Efforts should also focus on attaining compatibility of the UAF with NATO member- and partner-nations' air forces.

With a view of attaining the above objectives, Ukrainian Air Force personnel will step up combat training in 2005.

In particular, a series of exercises and maneuvers will be carried out, which, in particular, will involve live launches of Osa ("Wasp") and Buk ("Beech") SAMs.

Besides, UAF pilots will have more strenuous training flight schedules, with a view of bettering their skills.

This will be applicable, in particular, to personnel of the elite "Ukrainian Falcons" aerobatic group, as well as cadets of the Kharkiv University's UAF School, who will have 120 hours to 180 hours of flights each.

***

The UkrTransNafta company's latest forecast predicts that this year transit transportation of petroleum across Ukraine's territory may increase to 61 million tons.

In addition to traditional routes, transportation of crude petroleum via the Brody-Odesa pipeline is expected to reach seven million tons.

With petroleum transportation charges expected to remain at 10.25 USD per ton, the company's yearly earnings will amount to 71.75 M. USD.

Technological petroleum for filling the pipeline cost 10.8 M. USD.

According to the company's calculations, up to 20 M. tons of crude petroleum may be piped in that direction, provided the company's tariff policy is flexible.

What needs a prompt solution is the rental payment for transportation of petroleum.

In accordance with the Law on the f. y. 2005 national budget, the rental payment has to be raised from 0.685 USD to 0.85 USD per ton.

Under such circumstances the UkrTransNafta's move to raise the tariffs may compel the Russian party to abrogate its commitments with regard to guaranteed supplies of crude petroleum to be transported to the Southern Oil Terminal in the vicinity of Odesa.

Yet, preserving last year's tariffs unchanged vis-a-vis the raise in the rental payment will jeopardize implementation of projects, which the company views as essential for securing reliability and safety of major oil pipelines.

These include construction of new tanks, immediately relocating the Druzhba pipeline system's segment from the Transcarpathian zone, which is viewed as environmentally endangered, creation of a network of large tanks to keep strategic stocks of petroleum.

Such programs will most certainly require not only revocation of the rental payment, but also sizeable budgetary funds because the company's plans need tremendous investments.

According to UkrTransNafta company sources, the company's numerous appeals to central authority bodies, the Verkhovna Rada of Ukraine with regard to lifting the rental payment drew the authorities' negative response.

The UkrTransNafta's another pressing problem is the need for application of discounts with regard to port fees in the Southern Port, which the Ministry for transportation and communication nullified as soon as the Southern Port started handling Russian petroleum.

According to the UkrTransNafta, presently port fees, which are levied at the Southern Port exceed those at the Odesa Seaport 1.5 to two times.

NOTE:

In 2004 the Ukrainian oil transportation system carried 55.3 M. tons of oil, of which transit transportation accounted for 32.5 M. tons, supplies to oil refineries accounted for 22.4 M. tons, and technological petroleum accounted for 0.4 M. tons.

According to the Ministry for fuels and power industry, in 2004 the aggregate amount of petroleum, which was piped through the Ukrainian oil transportation system, reduced by 1.3 M. tons, or by 2 percent, as compared with 2003.

Exports to Central Europe (Slovakia, Hungary, the Czech Republic) amounted to 644,000 tons, which was 2 percent less than in 2003.

Supplies of petroleum to Ukrainian oil refiners last year were down from 2003, too (by 1.044 M. tons, or by 4 percent).

***

For the first time since the company UkrFerry was founded, in 2004 the company's carriage of cargos diminished (from 543,100 tons in 2003 to 532,000 tons in 2004).

The number of freight cars, which the UkrFerry carried between Ukraine and Georgia, decreased from 6,013 in 2003 to 5,554 in 2004.

Besides, the average number of freight cars, carried by the company's ferry-boats, diminished from 47 to 41 per voyage.

The situation was similar in the UkrFerry's Turkish lane. In 2004's first half 93,400 tons of cargos was carried between Illichivsk and Derinje (Turkey) versus 97,000 tons in 2003's similar period.

The number of freight cars, carried in each voyage, diminished from 28 to 22.

The ferry lane between Ukraine and Bulgaria was hit by the very same downward trend.

In previous years ferry carriage of cargos used to annually grow by 3 percent to 35 percent.

So, the downward trend, if it persists, will jeopardize Ukraine's participation in creating and developing transnational transportation routes.

The natural question is why so?

Why Ukraine, which used to be in the lead in ferry carriage of cargos in the Black Sea, is ceding its ground?

According to the UkrFerry company's analysis, the deplorable state of affairs is the result of the UkrZaliznytsia's policy to continuously raise tariffs for use of the Ukrainian Railroad Administration's rolling stock.

For example, since January 1, 2005 charges for using refrigerator cars have increased over eightfold (sic!).

Other tariffs have been raised, too.

Besides, in 2004 all franchises with regard to port fees were nullified.

The UkrZaliznytsia has also raised its demurrage penalties.

Rail haulage costs have become unaffordable, so many cargo owners have to use other means of conveyance.

The International Association of Ukrainian Expediters and the UkrZovnishTrans ("Ukraine's External Transportation") association, which unite over 200 expediter organisations, sent a letter of protest against the UkrZaliznytsia's unwarranted raises in tariffs to the Ministry for transportation and communication.

The two Ukrainian organisations were joined by their Bulgarian and Georgian counterparts, who repeatedly approached the Odesa Railroad Administration and UkrZaliznytsia.

Regrettably enough, the dispute between the UkrFerry and the UkrZaliznytsia is benefiting their competitors in Russia and Romania.

In mid-January 2005 an agreement on ferry communication was signed between the Georgian seaport Poti and the Russian seaport Kavkaz.

In keeping with the agreement, every three days a 24-car train will be transported between the two seaports.

The Russians visited Armenia to persuade that country to use that ferry lane for carrying Armenian cargos, thus by-passing the Ukrainian port Illichivsk.

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