Libmonster ID: UA-12183
Author(s) of the publication: Anatoliy KHAKHLIUK

Candidate of Economy, leading researcher, Institute for the World Economy and International Relations, NA S of Ukraine

* * *

Development and implementation of technical and economical aspects of Ukraine's transport policy is a key problem of the national transport system modification for fitting transport standards of industrial countries. To achieve the national targets it is necessary to take into account a specific effect of international regulations on transportation services market and trends of transport management by leading transport monopolies. The basic benchmarks of the strategy for adapting the national transport to frontier transport systems are as follows: to optimize access of traffic of the 5th and 9th international transport corridors to the Black-Sea ports in Ukraine; to form a tanker fleet for barging oil from Azerbaijan and Iran.

These tasks should be coordinated with mechanisms and instruments of investment policy and stages of its implementation. Functional stability of the national transport system in any segment of the world transport market is determined by its competitive abilities with respect to objective need in using the most efficient ways for goods transportation. Today, a lack of functional stability in regional and transit sectors of transportation services market results in the necessity to solve the following problems of Ukraine's trucking industry: to form competitive technical and economic basis for transportation services; to implement a general (one-time) complex monitoring of transit traffic security; to ensure an uninterrupted transit cargo traffic on the basis of free passing through adjacent transport systems with monitoring of traffic through main junctions of the national ITC zones; to set a charge cap at the rate of the limit of extra expenses to total expenditure of cargo holders for the delivery and sales of goods.

Today, enterprises of Ukraine's national industrial infrastructure cannot rely upon direct state investments. However, while developing the efficient transport and navigation policy it would be advisable to practice a sound protectionism and to ensure favorable investment, economic conditions and cargo preferences. Cargo traffic from the third countries being a separate type of foreign economic activities for transport complexes of countries with favorable geographical location, Ukraine can derive a lot of benefits from its geographical position which is in line with the European transport system integration for minimizing time and limiting expenses for goods delivery.

Concept for Ukraine's participation in developing the ITC and renewing the Great Silk Route should be based on a scheme of transport and economic relations between Western and Eastern Europe approved by the EU Pan European Conference, in 1994, and on the long-term model for improving transport and economic relations between Western

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Europe and Asian consumers of hi-tech products and foodstuffs, as well as with producers of energy and natural resources.

It should be noted that the declaration on creation of new trans-European transport corridors is of quite fragmentary character. In 1997, the 3rd Pan European Transport Conference considered the problem of optimizing international transport corridors. However, the conference documents did not deal with any pressing problems of creation of international transport corridors and formation of investment security and did not eliminate errors in calculations of main traffic parameters in the main directions. As a result of such miscalculations, some large commercial ports of global importance were not included in transport corridors.

Stable operation of the Ukrainian parts of the ITC depends on their adequacy to the market demands. For this purpose it is necessary to achieve a competitive technical and economic level and to create favorable economic and legal environment for stable operation of national transport enterprises, main lines, ports and shipping companies.

The first direction requires mobilization of large investment resources. Since Ukraine still feels a lack in, the main priorities of short-term strategy should be ensuring the relevant transit conditions on the basis of the Ukrainian enterprises and their parity involvement in the regional market activities.

The basic trends of formation of standard and methodological regulations are as follows: option of system and trends of business cooperation of basic operators in transit cargo traffic of ITC which ensures pursuing the integration regional policy; direction of legal basis toward coordination of actions as regards harmonization of industrial infrastructure capacities, extension of using the advanced technologies of goods delivery, optimization of monitoring of cargo traffic under a criteria of their processing intensity; realization of a program for modernizing a transport network of the country under a criteria of compliance with the adjacent kinds of transboundary transport systems; substantiation and ensuring of general and economic security of transport activities; harmonization of forming the financial flows for the use of road- transport systems which connect the commercial ports of neighboring countries; development of unified transit procedures with countries through the territory of which intermodal routes pass; adoption of a unified accompanying document and uniform guarantee of transit cargo traffic security; international definition of specialization of separate ports in the system of transit cargo traffic under criteria of minimum total costs of transport-cargo holder system, competitive ability and ecological compatibility.

Carrying out an analysis of state and dynamics of developing the country's transport complex in the past decade let us try to forecast its prospects for the period up to 2010. For instance, research of statistical data of Ukraine for 1990-2000 shows that dynamics of traffic volumes by all modes of transport corresponds, as a whole, to general economic trends of the country's economy functioning dynamics, particularly of ITC' changes dynamics.

Assuming a correlation dependence of traffic change factor by the basic modes of transport with Ukraine's GDP rate factors as a basis of retrospective analysis we can forecast a utilizing capacity, number and structure of traffic. For instance, calculations for the railroad carriage show that in 2005 in comparison with 2002 a volume of cargo traffic will increase by 25. 8 per cent and by 61.7 per cent in 2010. A turnover of goods for the near five and ten years will increase by 50.4 per cent and 2.2 times, respectively. It means that during the forecasting period there will be no essential changes in the international economic processes which can affect the economy of Ukraine and its foreign economic relations.

Reorientation of the Ukrainian railroads toward a foreign market being currently under consideration, will preserve and strengthen.

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It is conditioned by intensification of foreign economic relations of Ukraine with the CIS countries and especially with Russia, by its joining the international conventions and agreements in the sphere of international traffic, diversification of activities to create the national network of international transport corridors and its integration in the transport systems of Europe and Asia, as well as in the Baltic and Black Sea region. The national transport system being under modernization, improvement of organization of transit cargoes delivery will essentially increase a volume of cargo traffic being the basic source of transport services export.

Leading positions of the Ukrainian export are and will remain in the near future the products of metallurgical, chemical production, agricultural and industrial sector, but a lion's share will account for the products of machine-building complex which ensures an increase of cargo traffic volume, including the increase in the international railroad communications up to 2005 as compared with 2000 by 27 per cent and export cargoes by 28.4 per cent. In 2010, these indices will increase as compared with 2000 by 65 per cent and 74 per cent, respectively. In the structure of "cargoes" a significant share will account for cargoes transported in containers. Their present volume is not significant and, in 2000, they accounted for 161.3 thousand tons. However, this is the most prospective kind of transportation (in the leading countries of the Europe their share in the total volume of railroad carriage amounts to 50 per cent); in 2005 it will reach 300 thousand tons and 800 thousand tons in 2010.

At present, fuel and energy resources, as well as minerals, timber and other kinds of products are dominating in the structure of import in Ukraine. The main volume of fuel and energy resources are being imported in our country through the pipelines. Oil and oil products, nearly 4 million tons, and coal, more than 6 million tons, are imported by railroad.

In future, oil and oil products, just as today, will be imported through the pipelines.

Oil is expected to be imported in Ukraine not only from Russia, but also from Azerbaijan, Kazakstan and Turkmenistan as production of energy carriers in the Caspian shelf increases. A route of transportation has been determined: from Baku to Georgian sea port of Supsa through a pipeline, further by tankers to Odesa and then by pipeline Odesa-Brody to refineries of Ukraine (for domestic needs) and for transit delivery to the European countries. Agreement on the creation of free trade zone signed by presidents - GUUAM members during their summit in Yalta, in July 2002, will facilitate the laying of Euro-Asian oil transport corridor. In future, this organization, in opinion of L. Kuchma, is to be transformed into one of the most prospective and optimal connecting links between Europe and Asian-Pacific region. This is just such a vector of economic cooperation that can become one of the most powerful and dynamic in the world economy of the 21st century.

Volume of transit railroad traffic in the structure of international traffic system accounts for nearly 29 per cent and amounts to 39.8 million tons. Commodities flows which cross the territory of Ukraine by railroad or by other modes of transport result from the barter of the CIS countries with the European countries, as well as with the countries of Near and Middle East, countries of Africa and America. Besides, though in a lesser volume, transportation of commodities from the countries of Europe to the countries of Asian continent and on the contrary is carried out by our railroads.

The Russian exports and imports are at the heart of today's commodity flows between the CIS countries and the European countries. In direct railroad and mixed railroad- sea traffic nearly 65 per cent of transit traffic volume by the Ukrainian railroads accounts for Russia. Volume of Russian transit by railroad reaches 40 million tons, nearly quarter of which being in the direction to the Ukrainian sea ports and further to our neighbor; within the CIS

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countries, the main volume of transit traffic by railroad goes out of Belarus, Kazakstan, Turkmenistan and Uzbekistan in the direction of the European countries.

Forecast as regards transit cargo traffic by railroad is made with economic processes in the CIS countries, Europe and Asia taken into account. Prospective volume of transit cargo traffic by the Ukrainian railroads will increase for the period of 2000- 2010 by 68.6 per cent and will amount to 67.1 million tons. Increase in transit flows will be reached basically due to transportation of coal (increase by 70 per cent), oil and oil products (plus 41.5 per cent) and other cargoes (4.5 times).

Improvement of transportation facilities (trains, wagons) and increase of both passenger and freight trains' speed will facilitate the development of railroad branch and increase in traffic volumes, including transit cargo traffic. Volume of railroad traffic will increase basically due to electric traction (86 per cent in 2002). For these purposes, Ukraine will increase an extension of electrified lines and will launch a serial production of new powerful electric locomotives at research and industrial association Dnipropetrovsky Locomotive Works (nearly 22 units per year). Higher educational establishments of Ukraine such as Dnipropetrovsk Transport University, Kyiv University of Transport and Economy of Ukrzaliznytsya, etc., improved their programs for training of engineers and railroad specialists.

Prospect for the increase in the international trucking, including the transit one, depends on the development of transport-road infrastructure. The Ministry of Transport of Ukraine developed a program for building of autobahns network according to the European standards. Modern autobahns will connect Kyiv with the capitals of the Central and Western European countries, as well as with Simferopol, Odesa and Kharkiv. From Kharkiv an autobahn will go out to Russia's frontiers. The highways are expected to be end-to-end and transport vehicles will move at a higher speed. The cost of project will amount to USD 2.5 billion. One of the Chinese insurance companies agreed to finance it and State Corporation Ukravtodor which is going to issue the bills will become a credit borrower. Terms for loan, in our opinion, are quite acceptable; maturity term is a 14-year period, 7 per cent annual. The first tranche of credit will account for USD 1 billion and will be available in the near future.

According to the Ministry of Transport of Ukraine, it may take only several years to construct the network of autobahns (3,143 km). The EBRD is likely to join the financing of this project, its investments being nearly EURO 70 million. One of the sources for the reimbursement of credits may be a fare for travel in some sectors of road being a common practice in all the European countries.

Realization of this program is very vital for Ukraine since a state of our roads constantly degrades. During the recent four years a volume of road construction declined 7 times, its investments diminishing 10 times and state financing - three times. In the international practice an index of annual capital investments (per one kilometer of road) is used to determine a quality of roads. For instance, in Ukraine it makes up USD 1,103, in Belarus - USD 5,540; in Russia and Germany - USD 9,800 and USD 24,500, respectively. Under such conditions the investments are not only appropriate, but also necessary.

Improvement of information support on the highways and development of service centers is of great importance for better regional attractiveness of our territory. In the performance of the Ukraine's President Decree the Cabinet of Ministers approved by its Resolution #586, of April 27, 2002, Program for the creation of information support system on the highways of general use for the period of 2002-2010. Its objective is to reach a proper functioning of the country's transport-road complex, timely response for extreme cases occurring with the participants of traffic, ensuring of the necessary information about

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a regime, conditions, direction and route of traffic, as well as location of road network objects.

Further aerospace complex built-up will facilitate the development of the country's transport infrastructure both in regional and global aspects. Ukraine has come to the forefront in the sphere of manufacturing air liners and transport aircraft, missile carriers, space vehicles and multifunctional radio-electronic systems and is successfully realizing the international joint projects.

In Ukraine, there are currently over 1.5 thousand aircraft united in 67 aviation companies. Airplanes of the Ukrainian aviation companies fly to 35 countries of the world by 105 routes. In their turn, foreign aviation companies from 28 countries carry out regular transportation to 9 cities of our country. There are 36 airports on the territory of our country, the international check-out stands being in seventeen of them.

Ukraine is among top five countries whith the advanced aerospace technologies. To further the branch it is necessary to participate in the projects realized in Europe, the USA, the CIS countries, mainly in Russia, and in some countries of the Near and Middle East and in South America.

There are good prospects in future for our youngest branch of the country's transport complex - a space one. It performs not only global, planetary, but also inter-planetary, extraterrestrial functions.

However, we should be realists: our scientists can help our country only by participating in joint international projects. For instance, our country fruitfully cooperates within the framework of program Naval Start under which eight space vehicles were launched by the Ukrainian missile Zenit-3SL. Today, the most successful is a joint Ukrainian-Russian program for transformation of ballistic rocket into a peaceful launch vehicle Dnipro. The USA State Department approved plans concerning organization of the first commercial flight to Moon. Within the launch program scheduled for the near 9-12 months Dnipro must place in the inter-planetary trajectory station Traiblazer which will transmit to the Earth on the payment basis a high-quality television image of Moon's surface. It is scheduled to start since 2006 commercial exploitation of the first world complex Air Start. The project's cost will be USD 120-130 million (cost of launching is up to USD 7.5 million, total cost of orbiting a 1-kilogram cargo being USD 2-2.5 thousand). In the world market a price for launching missile carriers of Polit type amounts to USD 20 million. It means that the project will be repaid for 10-12 commercial launches or for 2,5 - 3-year period.

The main argument in favor of Air Start is an increasing demand for launching middle and small class satellites for middle and low earth orbits. Today, this market segment increases noticeably. Nearly 1800 light space vehicles are expected to be launched within the period of 2000-2015.

Design Office Pivdenne and enterprise Pivdenomash won a tender for the development, manufacture and launching of communications satellite for Egypt. The South-American countries are also interested in our rocket-space technologies. As known, the Naval Fleet provides global transportation whereas an inland water transport deals with regional carriage. Analysis of indices of water transport enterprises' activities shows that our domestic fleet remains as before under crisis. Some upward tendencies that appeared three-four years ago have not yet ensured a pre-crisis level of transportation. However, we still have possibilities to revive the fleet. In case of traditional approach it will take us some tens of years and much less in case of accelerated development of Ukraine's water transport. This problem requires a complex solution. It is necessary not only to create a new water-craft and to recommence sea and river shipping, but also to reconstruct and increase capacity of sea ports, and, as a whole, to develop a whole sea industrial complex of Ukraine: water transport, dock-industrial

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complexes, ship-building, fish-industry and fish - processing plants, as well as infrastructure to ensure security of sea industry's activities, scientific institutions and design offices, etc. For this purpose, it is necessary to develop a long-term sea doctrine and a uniform state approach to a scientifically grounded option of model for the prospective sea industrial complex. In our opinion, the following provisions may become basic for such a doctrine:

* strategic plan of complex reformation of sea sector of the economy;

* development (more precise definition) of conceptual documents and programs in the context of the new doctrine, including the Program for Stabilization and Development of Sea and River Transport of Ukraine till 2000;

* raising a level of monitoring of reforms concerning forms of ownership in the spheres of sea industry, controlled ownership restructurization on the basis of principles of balanced development of various forms of ownership, further effective state property privatization, return to state ownership (or increase of state share) of privatized unprofitable enterprises due to bankruptcy and sanitation procedures;

* improvement of legislative basis: development and adoption of laws as regards further regulation of activities of sea industrial complex branch;

* strengthening of state support, enhancement of role and responsibility of the Government of Ukraine in the development of sea industry branches;

* ensuring a set of measures regarding a rescue of state shipping company Black Sea Steam Navigation;

* establishing a system of quoting of the national sea shipping used widely in the world practice, etc.

Important factor of regional development is pipeline (gas pipeline and oil pipeline) transport. Currently, Ukraine is the largest transit country through the territory of which the natural gas can be transported. Through a system of gas mains being at disposal of the National JSC (NJSC) Naftogaz Ukrainy the Russian natural gas enters the countries of Western, Central and Eastern Europe. An input carrying capacity of domestic gas transport system amounts to 290 billion cubic meters per year, its output carrying capacity being nearly 170 billion cubic meters per year. Actually, every year approximately 110 billion cubic meters of gas are pumped across the Ukrainian pipelines.

Prospects of stabilization and even increase in transit of Russian and Turkmenian gas by the Ukrainian pipelines are in no way simple. The situation will become more favorable when Russia has made every effort to stabilize gas recovery at a level of 600 billion of cubic meters per year. So, it is necessary to make large capital investments since in prospective gas-bearing districts of Russian federation, in Yamal, there is no a proper infrastructure. However, we should remember that an idea of constructing pipelines that by-pass Ukraine is being implemented. The first pipeline run Yamal - Western Frontier, including the territory of Belarus, has been already constructed, its capability being 28 billion cubic meters (just today, 14 billion cubic meters of gas are pumped across it, its design indices to be attained; there exists also a project of construction of the second pipeline run, the total capacity being 56 billion cubic meters of gas per year).

A simple calculation shows that realization of these projects requires large financial resources: the pipeline run from Yamal (USD 2-2.5 billion) across a Black Sea bed to Turkey (here, construction of the first pipeline run is completed) - USD 3 billion. The total cost of the project is USD 10 billion. Therefore, one should think whether it is necessary or not to spend such funds when the Ukrainian gas transport system is not loaded. However, if these projects were fully realized then 88 billion cubic meters of gas would go to Europe by-passing Ukraine.

This brings up an issue of establishing an

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international gas consortium consisting of Russia, Ukraine and, may be, Germany (some other countries are likely to join the consortium) to ensure an unhampered transit of gas to the European countries (decision on its establishing was taken during a summit of leaders of Russia, Ukraine and Federative Republic of Germany, June 10, 2002, Saint-Petersburg). Creation of consortium will allow Ukraine to solve a number of problems. Firstly, to preserve a status of the largest transit country through the territory of which the Russian gas is pumped to Europe. Secondly, to remove from the agenda an issue of by-pass pipelines. Thirdly, to attract in the near future USD 2.5 billion to reconstruct the Ukrainian gas transport system. Fourthly, to sign a long-term (till 2013) contract on conditions of transit and volume of the Russian gas to be pumped across Ukraine. Besides, Russia can provide continuous gas delivery from the Central Asia under agreements concluded by Ukraine.

There are the following problems which should be solved on the path to creation of consortium: to determine a share of each country in the project; to determine a form of ownership for the gas transport system. As regards a share of each country in consortium Ukraine insists on securing for itself 51 per cent of shares, i. e. a controlling block of shares. However, we should not be categorical. It is necessary to take into account interests of every party involved in this triangle: Russia is a producer, Ukraine and Federative Republic of Germany being a transit country and a customer, respectively. Nobody's interest should be infringed. Perhaps, Ukraine should make concessions to its partners.

Ukraine is also a transit country for Russian oil. Annually, 25 million tons of Russian oil is exported to Europe through the oil pipeline Druzhba (its length being approximately 4 thousand kilometers). For the purpose of diversification of energy carriers sources, strengthening of Ukraine's role as a regional transit country for oil, Odesa-Brody pipeline has been constructed. This pipeline was constructed to transport the Caspian oil produced in Azerbaijan through the Ukrainian territory to the Central European countries. The Caspian oil transited through the Georgian terminal Supsa will be delivered in tankers to Odesa and then through the pipeline to the West. The Ukrainian Government being sure in the expediency of the project, the Azerbaijan's authorities are not entirely satisfied. The Ukrainian version of oil transportation is regarded by the producers as additional to a basic route Baku-Supsa- Dzheikhan. In order to realize the Turkish project in August 2002, in London, an international corporation was established, the USA State Export Bank, Lukoil, the EBRD and several other large companies being among its members. The total investments into the project amount to USD 13 billion, a pipelining completion term being the end of 2004.

Thus, the Turkish route of the Caspian oil is currently to be under way, whereas the Ukrainian one has been already completed and ready to function. Perhaps, it is necessary also to create an international consortium which will pay for oil transportation. Some preliminary calculations show that transit of one barrel of oil in the section of Baku-Supsa will cost USD 1.23, tankers fleet services - USD 0.3, cost of oil transit by oil pipeline Odesa-Brody being USD 1. So, the total cost of transportation will not exceed USD 2.8-2.9 per one barrel. This is a good tariff. In future, it will be cheaper than that under route Baku-Supsa-Dheikhan. Realization of the project is hampered, by the way, by the Ukrainian legislation which (as noted before) prohibits not only the ownership, but also monitoring of domestic pipelines by anybody, except the state.

Taking into consideration that pipeline Odesa-Brody is aimed at transiting the Caspian oil to the Europe, Bosporus carrying capacity being low (only 35 million tons per year) one can see that not only Azerbaijan oil, but also Russian and Kazakstan oil can be

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delivered from port of Novorosiysk through Odesa to Europe. From economic point of view the advantage is evident. Our Government needs political will and ability to find a common language with the partners and to carry the project to its conclusion.

Thus, the development of gas and oil transport systems of Ukraine is a priority one in the transport communication of Asian sources of energy carriers and their European customers. In future, Ukraine may play a greater role as a transit country in the European (Euro-Asian) region.

Ensuring of efficient work of customs and frontier points will facilitate the development of international traffic. In Ukraine, there are currently 230 customs. Efforts were made to bring a domestic customs legislation into accord with the European standards. As a result, on July 11, 2002, Verkhovna Rada of Ukraine adopted a new wording of Customs Code of Ukraine.

Unfortunately, the expected introduction of visa regime at frontiers by Poland and Hungary will pose certain difficulties. Crossing of Slovak frontier after introducing by Slovakia of such visa regime may be a good testimony to it. Our country should make political and diplomatic efforts so that there will be no new lines of demarcation at Ukraine's frontiers due to joining the European Union by our western neighbors.

Translated by Olha Zahorodnia


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Anatoliy KHAKHLIUK, TRANSPORT INFRASTRUCTURE OF UKRAINE: REGIONAL ASPECT // Kiev: Library of Ukraine (ELIBRARY.COM.UA). Updated: 06.12.2021. URL: https://elibrary.com.ua/m/articles/view/TRANSPORT-INFRASTRUCTURE-OF-UKRAINE-REGIONAL-ASPECT (date of access: 18.01.2022).

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