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    Impact of war on transport

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Ukraine: Initial thoughts on the impact of war on transport and a potential action plan

Authors: Viktor Zagreba, Armin Wagner

Contributors: Demyan Danylyuk, Marta Pastukh, Nadiya Oleshchuk, Nataliia Mospan, Valerii Mospan

Introduction

This article presents initial observations and thoughts on the necessary restoration of Ukraine's transport system as well as the prospect of re-orientation.

The war against Ukraine is showing its ugliest face. Endless suffering, dead, injured; dreams and hopes destroyed. In addition to irreparable human losses, the economic and infrastructural devastation of this war in the heart of Europe is already enormous.

Numerous important infrastructure facilities in Kyiv, Kharkiv, Ivano-Frankivsk, Vinnytsia, Dnipro, Chernihiv, Lviv, Sumy regions, and elsewhere have been destroyed or damaged along with the world’s largest aircraft, the famous AN225. Since the beginning of the war, at least 411 educational institutions, 36 health care facilities, 1,600 residential buildings, 26 factories/warehouses, 15 airports, 7 thermal / hydropower stations, etc. have been damaged, destroyed, or seized in Ukraine.

In addition, more than 15,000 km of roads, 5,000 km of railways, at least 350 bridges and bridge crossings, etc. were destroyed/decommissioned. According to estimates, the losses caused by the war already amount to more than 100 billion USD; half of the country’s economy is at a standstill. At the beginning of March 2022, the direct losses of Ukraine's transport infrastructure equal over $40 billion . According to the announced data, the following were damaged, destroyed or captured:

  • Roads: 27 546 million USD;
  • Civil airports: 6,816 million USD;
  • Railway infrastructure and rolling stock: 2,205 million USD;
  • Bridges and bridge crossings: 1,452 million USD;
  • Ports and port infrastructure : 622 million USD;

As a result of the lack of life safety conditions in the active war zones, the loss of housing and income, many Ukrainian people were forced to leave their homes. Early estimates by the UNDP indicate that nearly 30 percent of the Ukrainian population are likely to require humanitarian assistance. In its current scale and direction, 18 million people are projected to become affected and more than 7 million people internally displaced . The important task for the municipalities of non-embattled cities currently is to aid, shelter, and host the population displaced from active war zones. The governments of non-embattled cities are located in the central and western part of Ukraine and they are under considerable stress just to maintain basic services to large numbers of refugees/IDPs, including ensuring appropriate transport services for the population and providing well-targeted logistic services. For this reason, the entire country’s transport system must work efficiently in these challenging for Ukraine times and plan the way for the immediate infrastructural restoration.

Challenges and potential approaches on national and regional level

As an important branch of the national economy, the transport sector will be highly affected by the country’s changes caused by war. It is unclear how the military situation, the political process, and the countermeasures around the world will play out – in either the shorter or longer term. However, it is already certain that a consequence of the war’s impact on the transport system will affect many in Europe and beyond. Among the most visible regional and global transport sector’s challenges affecting Ukraine but also other countries could be highlighted the following:

Regional and global level challenges are affecting Ukraine but also many other countries

  • The diversification of Ukraine’s transport flow will become a very relevant topic, with substantial focus transit to the west (PL, RO, HU, SK) if navigation in the Black Sea basin remains challenging, trade with Russia and Belarus will be very limited.
  • Long-distance connections in Ukraine by train / road are considerably restricted, freight rates are becoming more expensive.
  • Europe's "eastern" access via Belarus and Ukraine is already or will be largely closed. This increases the dependence on shipping routes via the Suez Canal or Turkey/Iran. Rail connections from China to Europe are shut down or re-routed (Поезда Финляндия-Китай пойдут в обход россии — Центр транспортных стратегий (cfts.org.ua)).
  • Ukraine is one of the largest wheat exporters for countries in the global South countries (8% of wheat exported); interruption or disruption can have significant consequences also for the global South.

Ukraine's importance for international food supplies is coming into focus; trade flows will shift significantly. Ukrainian Railways (UZ) reports, for example, that, “Almost 95% of agricultural products were exported through the sea commercial ports of Ukraine. Currently, only two of Ukraine’s ports – Izmail and Reni – are able to reload cargo for export, though only in small quantities. In February 2022, 2.9 million tons of grain were loaded, which is 37.4% more than in February 2021. For 11 days in March 2022, 100.2 thousand tons of grain were loaded, which is 87% less than in the same period last year.” (https://www.uz.gov.ua/press_center/up_to_date_topic/578790/).

The situation of Ukrainian ports as of 21 March is as following: the ports of Mariupol, Berdyansk, Skadovsk, Kherson are temporarily not working - the entry / exit of ships is temporarily impossible; ports of Mykolaev, Olbia, Pivdenny, Odesa, Chernomorsk - partially carry out the processing of the fleet available at the berths and shipment by rail and road. Entry/exit of vessels is temporarily impossible. (В МИУ рассказали о ситуации в морской отрасли в условиях войны — Центр транспортных стратегий (cfts.org.ua))

The list of mentioned-above findings is initial, and it is already obvious that further factfinding and forecasts as likely to be added next months when the world will have the full picture of the impacts of war on supply chains logistics, and the public transport sector. But some potential approaches to the stabilization and re-setting of the Ukrainian transport system are already visible.

In the short term, it is necessary to strengthen the handling capacities of the Ukrainian railways as well as the border points and the corresponding road capacities. The UZ has calculated the capacity of freight wagon traffic via different border points (https://www.uz.gov.ua/press_center/up_to_date_topic/page-9/578203/); here, different transport scenarios depending on factors such as agricultural development should be kept in mind and traffic flows should be monitored.

It has become clear that over the long term, the Ukrainian transport system needs to be significantly adjusted.

In peacetime, almost all exports and imports of Ukraine were focused on seaports. The war has shown that such a strategy is unreliable. The war will end, but risks from the neighborhood’s aggression could remain. Therefore, Ukraine needs to build infrastructure for the development of exports and imports across the borders of Western Europe. This requires improving the infrastructural preconditions, including the rerouting of central railway connections, the improvement of road connections, an increase in the efficiency of border crossing points as well as the promotion of modern logistics solutions. UZ has already initiated this process and invites investors to set up logistics facilities in Lviv and Transcarpathia regions (Source: https://www.uz.gov.ua/press_center/up_to_date_topic/578954/). An important building block here can be the re-construction / re-gauging from broad gauge to Euro tracks (1435 mm) to central locations in Ukraine in order to facilitate logistics and to reduce costs. The country should re-conceptualize the logistics for all regions by clustering the territory and developing the network of logistic hubs ensuring the satisfying the delivery needs of population and enterprises. This will guarantee the reliability of the freight transport system of Ukraine.

Moreover, Ukraine should start fully using the potential of inland waterway transport. About 4 000 km of inland waterways pass through Ukraine (Dnipro, Danube, and Southern Bug), which can potentially transport freights. The length of waterways used by shipping has almost halved since 1990, from 4 000 km to 1 900 km. Work on deepening the bottom of most rivers has not been carried out for more than twenty years. Thus, over the last years, inland waterway transport accounts for less than 1% of all traffic. Compared to European countries, these are critically small volumes. The development of inland waterway transport could become a viable alternative for road and rail transportation in the future.

Furthermore, considerable interruptions and disruptions of the energy supply are to be expected both in terms of electricity and liquid fuels. On the energy side, it is therefore necessary to further reduce dependence on imported fuels. Renewable energy is the ultimate form of energy independence since no sovereign state owns the sun. Moreover, as innovation drives down the cost of technology to convert solar and wind power to electricity, renewable energy will become less and less expensive. In addition, battery technology, essential due to the intermittent nature of solar and wind power is also improving. Thus, the restoration of the Ukrainian transport system should follow the strategy of maximization of renewables usage in freight and passenger transportation.

Following the global principles of sustainable transport system development, enough attention on the stage of the transport system restoration should be paid to the further expansion of public transport, better conditions for walking and cycling and a renewal of the vehicle fleet towards energy-efficient electric vehicles using renewable energies. This is, of course, a medium and long-term perspective; the focus now is on conservation and immediate reconstruction.

Challenges and potential approaches on local level

Wartime conditions significantly affect the planning, management, and providing transport services for the population and enterprises on the local level. This is clearly evident in the cities of Ukraine.

The transport infrastructure of embattled Kharkiv, Chernihiv, Mariupol, Okhtyrka, Gostomel, Irpen, Bucha, and other cities, was considerably destroyed. A lot of vehicles were set on fire in the fighting. Destruction of roads, tracks, transformer substations, transport facilities, etc. is already clearly visible. An example is the destruction of Kharkiv's tram depot after the Russian attacks: https://t.co/jBsOa1i7hN. The exact extent of the damage is hardly foreseeable.

At a first glance it seems like the cities of the central and western Ukrainian cities are more fortuned because they are away from active war zones. But in fact, the urban life of these regions was also changed significantly.

But even non-embattled cities in Western and Central Ukraine are facing major challenges due to a significant influx of internally displaced persons (combined with rising expenses), dwindling revenues due to reduced economic activities, a dwindling supply of spare parts, need for industrial re-orientation, business instability, and so on. A brief outlook of the main changes of urban life together with the transport concerns at Kyiv, Kropyvnytskyi, Lviv, Poltava, Rivne, Ternopil, Vinnytsia and Zhytomyr in wartime conditions are provided below:

  • Cities are accepting huge numbers of IDPs and act as hubs for the distribution of IDPs and refugees. In Lviv, the population has thus far increased by 200,000 and is likely to reach 1 million, with many newcomers coming by cars and using the cars to run errands. As a result, the share of trips by private cars increases in modal split.
  • City budgets revenues are falling sharply; as a result, many city council employees are sent on non-paid leaves of one to two weeks and city employees' salaries are reduced for the entire staff.
  • Due to frequent air-raid warnings, the normal operation of transport is disrupted. But both municipal and private transport operators still provide services satisfying the population’s needs in passenger transportation with a special focus on the needs of workers of critical infrastructure. Traffic volumes of passengers transported, and the number of vehicles used for public transport services on regular passenger routes have been significantly reduced in all central Ukrainian cities in comparison to the similar pre-wartime periods. For example:
    • Lviv has reduced from approx. 650 units [trams, buses, trolleybuses] in daily services to approx. 300 units, and Rivne, from 230 to 60. Many buses belonging to municipal and private operators are used for refugee evacuation and mobilized for the provision of transportation to the defense forces. In addition, diesel reserves are depleted and commercial cost for fuel skyrockets, spare parts and bus drivers are in short supply.
    • Lviv is providing evacuation buses (taken from regular services) between the station and the border – 70 bus trips per day – fully funded by the municipal bus company. In Rivne, 30 buses are removed from regular services to provide evacuation.
    • in Kropyvnytskyi city – the traffic volume of passengers transported has been reduced by 5 times;
    • in Poltava city – the number of vehicles used for public transport services on regular passenger routes has decreased by 40-50%.
  • Many vehicles previously used for passenger transportation are currently redirected to serve the transport needs of the Armed Forces of Ukraine and the Territorial Defense Forces. There are risks associated with the subsequent return of undamaged vehicles back to the transport companies’ vehicle fleet.
  • Cost of fuel has increased from UAH 26 per liter (before the war) to the rate of UAH 40.(On March 18, the Ukrainian government has substantially reduced fuel prices (Уряд суттєво знизив ціни на пальне в Україні - ZAXID.NET, market reaction as well as impact on availability/supply security needs to be observed)
  • Electricity costs have increased since the pre-war period by UAH 3 per kWh, up to UAH 5; even greater growth is expected.
  • A reduction in the level of solvency of the population does not allow an increase in the level of fares.
  • The supply of spare parts for tram and trolley networks and rolling stock is depleted in Ukraine as many producers are located in East and South of Ukraine and there is a break in the usual supply routes.
  • No infrastructure for the collection and storage of fuel for buses. This becomes more relevant as the invaders are destroying national fuel supplies and refineries.
  • Other cities, such as Ternopil, are reducing the collection of fees and rents to support local business – the mid- and long term impact of these policies on local revenues bases needs to be monitored (Мерія Тернополя звільнила підприємців від орендної плати за приміщення - ZAXID.NET).
  • Some vehicles from a fleet of transport companies are Belarusian-made buses (MAZ-103.486). Since Belarus is the partner of the aggressor country there is a need in considering the potential replacement of the recently purchased buses by other ones, because transport companies of Ukraine will not cooperate with Belarus in the future and could not repair and maintain them in an appropriate way without original spare parts.
  • Men’s mobilization together with potentially dangerous work conditions on public transport routes has reduced the number of drivers who agree and want to work in the public transport sector.
  • Since March 2022, Lviv has experienced increased congestion (above regular), parking violations and abandoned cars. The trend is likely to continue.

To be observed: Cancelation of tender procedures as in Ivano-Frankivsk: https://cfts.org.ua/news/2022/03/24/ivano_frankovsk_priostanovil_tender_na_zakupku_trolleybusov_s_avtonomnym_khodom_na_36_mln_evro_69689

At the local level, in the short term, it will be necessary in non-embattled cities to strengthen reception capacities for refugees and to strengthen basic provisions in the area of municipal services. This will also help to better manage refugee flows and accommodate them closer to home. At the same time, Ukrainian cities have also invested in significantly improving municipal services as part of the decentralisation of administrative services, and these achievements must not be risked. In the non-embattled cities, the following needs can be identified:

  • Effective functioning of transport control and monitoring system on local and regional levels to track the constantly changing situation on the roads/ tracks requires. Lack and delays in real-time information collection reduce the efficiency of the development of rational transportation routes.
  • Dynamic and flexible logistics in wartime conditions as all supply chains are supposed to adapt to changing conditions in the city/region. The lack of well-prepared logisticians for the development of top-targeted logistical solutions for different missions with different requirements is an important challenge the city/ region should know how to address.
  • Preparation of emergency transport plans for cities, which help to identify relevant, strategic transport needs and back them up with transport services accordingly;
  • Strengthening the technical basis by supplying vehicles/spare parts (buses, trams); generators, technical equipment for repair works, etc.;
  • Ensuring required workforce for the transport sector operation (for example, drivers, repair and maintenance workers, electricians, logisticians, etc.);
  • Budget support for transport companies to compensate for revenue shortfalls and purchase of fuel;
  • Strengthening the institutional capacity of transport departments officials by investigating best practices/ approaches of supply chain development in wartime conditions;
  • Pop-up infrastructure for cycle lanes and special public transport lanes to promote energy-efficient solutions;
  • Provision of (electric) cargo bikes and electric vehicles for municipal service providers to reduce energy consumption;
  • Mass provision of bicycles for emergency bike sharing systems (to offer viable alternatives and to reduce energy consumption).

Potential Action Plan

Transport system is vital to ensuring country connectivity and functioning of economic activities in wartime and peacetime conditions. To support the Ukrainian authorities in sustaining and rehabilitating the transport system at all governmental levels a comprehensive Action Plan can be developed. This plan should consist of the main measures and timeframes for transport system re-setting. With a short-, medium- and long-term view, an action plan for local, regional and national level could look like this:

Short term:

  • Humanitarian support for cities across Ukraine:
    • Establishment of transit camps;
    • Strengthening of municipal (transport) infrastructure and basic services;
    • Establishment fit-for-purpose coordination and information management system.
    • Development and applying of a consolidated approach to the humanitarian assistance provision of basic services in order to foster a harmonized response, and avoid duplication of efforts.
    • Supporting in providing transport services, especially for healthcare and transport for refugees.
  • Logistics emergency aid for Ukraine (support for transport corridors; procurement, storage, distribution, and delivery of food, materials, fuel, equipment, and other logistics services).
  • Transport support to the agricultural sector to conduct spring planting campaign and bridge supply chain disruptions (e.g. wheat and grain export).
  • Development of the transport sector’s employment measures.
  • Transport support for the relocation of some industrial capacities.
  • Establishment of “Ukraine Transport Observatory Center” with national and international partners to reliably and immediately provide information and data on damages, transport needs and sharing of best practices.

Medium-term: Winter Package 2022/23

  • Pragmatic support to municipalities for purchase of fuel, repair and maintenance support.
  • Improvement of the country connectivity by the development of intermodal hub logistics network.
  • Logistics support for the construction processes in the framework of the critical infrastructure restoration. Strengthening public transport companies and municipal energy suppliers (including vehicles, emergency generators, supply to refugee settlements, development of renewables).
  • Key question: What happens in the event of an oil/gas/coal import/export freeze?

Medium-term: Technical assistance for reconstruction planning

  • Recording of all infrastructural damages.
  • Technical and financial assessment of infrastructural damages.Concept development for the infrastructural restoration.
  • Preparation of the list of projects required for the sustaining and rehabilitating of the Ukrainian transport system.
  • Tender support (e.g. Terms of References preparation, development of the rules and evaluation criteria for tender participants, tender process organization and execution, etc.)
  • Key question: How can this transformation be made sustainable, climate-neutral?

Long-term:

  • Creation of Ukraine Freedom and Green Recovery Infrastructure Fund with substantial international financial support.
  • Development and harmonization of tools, methodologies, and procedures for use across Green Recovery and Reconstruction Programme.
  • Implementation of Green Recovery and Reconstruction Programme
  • Strengthening of technical and institutional capacity for Green Recovery and Reconstruction Programme implementation
  • Long-term EU Accession Support Transport and Energy.

Immediate action is required to address the above-mentioned challenges, to support Ukraine and to materialize the European orientation of Ukraine (association agreement). Without support for the transport sector, Ukraine will face severe trade challenges, urban service delivery challenges and remain reliant on foreign fossil fuel imports. International partners can support a sustainable modernisation process of the transport sector through immediate and concrete actions in the field of transport – both the urban dimension, regional connectivity and international trade corridors.

Source/further material/links:

Supporting Mobility in Lviv, Ukraine

In 2021 Lviv, Ukraine was selected as ITDP’s Sustainable Transport Award Honorable Mention. Today the city seeks for international assistance to keep the transportation and mobility systems operating. Resources that are needed are:

  • Rolling stock for public transport vehicles (used or new)
  • Spare parts, materials and fuel
  • Fuel for bus operators (to compensate for evacuation bus services between the city and the national border.)
  • Traffic management equipment
  • Special vehicles: e-bikes, tow trucks, emergency vehicles etc.
  • Direct financial support to public transport operators (6 operators)
  • Transport crisis response offices (technical assistance)

Please contact Maksym Terletsky on behalf of the City Institute directly to support the City’s humanitarian needs (phone number:+380678906153, email maksymterletsky@city-institute.org).

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