Cyclists face an uphill, dangerous ride in Kyiv
Although renewable energy is fashionable now in Ukraine, Kyiv residents will still rely on the internal combustion engine to get round for the foreseeable future.
Bicyclists who have navigated the dangers of Kyiv’s streets can testify to the hazardous realities of encountering motorists who don’t want bicyclists on the roads and pedestrians who don’t want them on the sidewalks.
Governments are simply not doing enough to encourage cycling — a clean alternative to the thousands of cars polluting Kyiv’s air and clogging its roads. After Vitali Klitschko was elected Kyiv mayor in 2014, he made improving cycling infrastructure one of his priorities. But, so far in 2017, seven cyclists have been killed in road incidents, compared to 14 deaths from 2014–2016.
Klitschko’s unfulfilled promise, consequently, elicits scorn amongst cyclists.
Nikita Skorenko, a professional road cyclist with Ukraine-based Kolss Cycling Team, says the problems that cyclists face stem from “road rage” and the lack of a “cycling culture in Ukraine.”
“Drivers don’t understand cyclists; they don’t keep their distance. They should leave a meter and a half, but barely leave any at all. As a professional cyclist, I can handle my bike, which means it’s safer for me. Less so for amateurs and normal cyclists. So many of them decide not to ride,” he told the Kyiv Post.
The attitude of drivers aside, another problem is the density of traffic.
A transport model made for Kyiv in 2015 was based on 213 cars per 1,000 citizens; far less than London (345) and Moscow (297), but slightly more than New York (209). There are 1.2 million cars officially registered, but A+S, the company which produced the model, think there are in fact 639,000, of which 566,000 are regularly used.
Dmitry Bespalov, the director of A+S, believes there could now be 220 cars per 1,000 residents.
Air pollution is a consequence. The Central Geophysical Observatory recorded poor quality air over the summer in Kyiv and says that pollution has increased over the last year.
A lot of the car usage is, arguably, not necessary.
According to data from the Kyiv Cyclists Association, 42 percent of car journeys are less 5 kilometers, a distance easily covered by bike. Moreover, drivers could put their cars to better use. A+S worked out that each car in Kyiv carries on average 1.51 people.
And yet, things are getting better.
Nikita Vognick, an administrator at the newly reopened Kyiv velodrome and an influential figure in its regeneration, told the Kyiv Post that four out of 12 of his colleagues cycle to work. It’s not that surprising for cycling aficionados, but he thinks enthusiasm is spreading.
He says that “since 2012 roads there are fewer potholes … drivers, not the majority, but some are noticing cyclists. A small minority still think cyclists should be on the sidewalk. But because of campaigns, fewer people are driving like arseholes. More people are cycling, or know people who cycle, so (as drivers) they’re more understanding.”
The Kyiv Cyclists Association agrees. Their surveys of cyclists in 2016 found that participation had increased 10 percent. The same was true in 2015 and they expect a similar increase this year.
Nonetheless, Vognick was critical of central and local government’s lack of investment into protecting cyclists.
“There’s zero state sponsorship for road cycling safety,” he said. Efforts to raise awareness of the risks facing cyclists are made by grassroots organizations, such as the “Roads for All” campaign, or the “Stop Killing Us” protest last week in front of Kyiv City Hall. Cyclists placed a white bike in front of the building in memory of the seven riders killed in the capital this year. Protesters called for more cycle paths and lanes and lower speed limits for cars.
Professional rider Nikita Skorenko thinks that the country needs to embrace cycling as a sport and spectacle before the bicycle becomes a popular means of transport. This is the case in Belgium, with a popular professional cycling team. Bikes now dominate the streets and there is a thriving amateur racing scene. A blend of private and public sector money is turning the United Kingdom into a cycling country.
Unfortunately Ukrainian sports bodies and private companies are apathetic.
Skorenko’s team is unlikely to race at the professional level next year after their main sponsor pulled out. The Ukrainian government has not stepped in with funding. Asked about the future of the sport in Ukraine, Skorenko replied: “It’s the end. There’s no support.”
“The cycling federation doesn’t help us develop,” he said. Help comes from team bike manufacturer Colnago. “But all the sponsors are foreign. Domestic companies aren’t interested.”
Some of the government spending to promote cycling among children and bike paths appears to be frittered away by corruption or misuse.
The situation on the Dnipro River’s Trukhaniv Island is farcical. Cars encroach onto the supposedly pedestrian zone with tragic consequences. In 2016, a pedestrian was killed when struck by a car and a girl sustained serious injuries after a car knocked her off her bike.
Residents and some businesses are allowed to use cars on the island. But it appears that drivers without access permits bribe guards manning the barriers.
Nikita Vognick from the Kyiv Velodrome thinks that much of the land ownership on the island is illegal in the first place. “Corrupt guys grabbed the land,” he reckons. He regrets that “we’ve lost this place where even children could ride.” Frustration is bubbling over. Some activists have barricaded the entrance to block cars. In June, cyclists, runners and walkers participated in a protest to “make Trukhaniv safe.” One of their demands was for speed cameras to be put in place to enforce the 20 kilometer per hour limit for cars. Thus far, their pleas have fallen on deaf ears.
The Kyiv City Administration did not respond to requests for comment. Energy independence remains a priority for Ukraine. The recently published Energy Strategy of Ukraine to 2035 reiterates our government’s aim of eliminating gas imports by, amongst other things, increasing domestic production to meet the needs of Ukrainian consumers. Gas exports to Europe will be the next logical step. Acting CEO of JKX Oil&Gas and General Director of Poltava Petroleum Company (PPC) – our Ukrainian subsidiary – I fully support these important goals, and believe that a lot can be achieved. But I am also well aware of the day-to- day realities in our sector.
Much still needs to be done to finally create an investment environment that will bring the capital and technology we need to achieve our common aim. The reality is that after three years of gas sector reform, some minor improvements aside, Ukraine’s gas production sector remains mired in antiquated bureaucratic procedures, access to data is highly restricted, and fiscal conditions are not competitive internationally.
A number of important proposals have been made to improve the regulatory environment in Ukraine’s upstream (oil and gas production) by supporters of energy reform in our parliament, the Association of Gas Producers of Ukraine (AGPU), the American Chamber of Commerce, and other NGOs. But the government now needs to begin implementing those proposals, and the Rada needs to start passing important legislation that has been languishing in committees for too long.
I would like to share my own view on what Ukraine needs to develop a dynamic, competitive and transparent gas production industry, so as to transform lofty goals on paper into reality, for the benefit of Ukraine and those who invest in its future.
Like the rest of Ukraine’s economy, our sector is in desperate need of investment, deregulation, stability and transparency. As a law school graduate, I, more than most, appreciate the importance of a strong legal system and its impact on the economy.
Today it takes around four years to receive the 44 permits from 16 different government agencies that are needed to begin oil and gas production. This is far too difficult, particularly for new potential investors. Several important draft laws to streamline permitting and simplify land use rules are ready and awaiting approval by parliament. There has been some progress in adjusting rules on license auctions, and modern guidelines for oil and gas field development have been introduced. However, we need a new Subsoil Code, which will stabilize regulation and put an end to the management of the sector by government decree. Finally, investors need transparency of information. Ukraine has a wealth of geological data after over a hundred years of hydrocarbon production, but it needs to be systematized, and open access to all legacy data (wells, seismic, etc.) must be guaranteed. We, together with private oil and gas producers and the Association of Gas Producers of Ukraine (AGPU), support free access to data for all investors.
Taxation in the oil and gas sector remains a major deterrent to investors. Other countries in Europe and the rest of the world that are actively competing for international capital more often than not offer more favorable tax terms than Ukraine. I am encouraged by the recent announcement of the Ministry of Finance that it will introduce a proposal for a reduced royalty on new wells into the draft budget for 2018, and I hope that the Rada will finally pass this proposal after failing to do so last year. But this is only the beginning. The current fiscal system is far too complex, with eight different royalty rates on hydrocarbon production. This needs to be simplified, while Ukraine needs to move towards a system of profit-based taxation – the common practice in the West. Such a system would be far more suitable to our mature geology, with many projects vastly differing in their risk profile and thus in need of more flexible taxation. However, this would also mean Ukraine would need to modernize its accounting and tax collection systems, and this is something that has not yet been started.
But in the near future, a simple 10-12 percent royalty rate, applicable over a broad tax base for all fields and wells, and guaranteed in law for five years would be an answer to a market desperate for investment.
Throughout my career I have been fortunate to hold senior management positions in both highly successful private and state-owned energy companies and have thought about the relationship between the state and the private sector in the oil and gas business a great deal. While the role of the state in our strategic industry will always be important, I believe Ukraine needs to expand the role of legitimate private business in the sector. Although the role of private companies has grown significantly over the past ten years, state companies continue to dominate with around 80 percent of production and 90 percent of proved reserves. Much progress has been made in reforming our state gas producer, UGV, and we are already seeing positive results in terms of investment and production growth. But the private sector will be the main driver for innovation and investment in the future. The experience of the United States and the role of over fifteen thousand small private companies in the hydrocarbon production revolution it has gone through over the past ten years is an example Ukraine must keep in mind.
How can Ukraine expand the role of the private sector? By offering more opportunities to investors. The government needs to focus on offering new licensing rounds. Those licenses where investor commitments are not being met – both state and private – need to be put up for auction. Ukraine needs to overcome the negative legacy of Joint Activity Agreements (JAAs) and offer new, transparent mechanisms for cooperation between the private sector and the state including services contracts and production sharing agreements.
A place to start could be work on giving investors systematic access to hundreds of state-owned wells outside licenses owned by state companies. As General Director of PPC, over the past year, finding ways to work on state-owned wells located within our license boundaries has been a top priority. While we have achieved some success in signing services contracts, the peculiarities of our legislation on the one hand, and public scrutiny of senior management at state-owned companies on the other, make this a difficult and lengthy process. Amending the famous Article 7 of the Law on Pipeline Transport to allow leasing of such wells by UGV would be a good start. Longer-term we need a transparent mechanism for the purchase of such wells by private license operators. After all, the practice of separating ownership of wells from production licenses is almost completely unique to Ukraine and is suboptimal for oil and gas field management.
More broadly, privatization of state assets in the oil and gas sector through a transparent process via auction to qualified investors is something that will be key to Ukraine’s long-term success. If Ukraine is to compete for foreign capital with countries like Mexico and India, which have made tangible progress in offering foreign investors a stake in their oil and gas sector over the past few years, privatization needs to stop being a dirty word. This is one aspect of reform still completely missing from Ukraine’s Energy Strategy to 2035.
Participants of Retro Cruise ride bicycles in Kyiv on April 29. (Kostyantyn Chernichkin)