Setting an Agenda

The 26th annual All-Ukrainian International Conference of Elevators of Ukraine was held September 8-9 at Ivushka health complex in Kremenchuk. This year, the conference was given the status of “international,” since the participants were from foreign partner countries, such as Belarus and Turkey. At the previous conference, there was a firm from Germany, as well. Therefore, future conferences will retain the new name.

During the conference’s two days, many speeches were delivered, many issues were discussed and a welcome was made by members of the Ukrainian magazine Lift Panorama.

Maria Pylypiv, the magazine’s editor-in-chief, and its technical editor-in-chief, Skrypets Oleg, expressed gratitude to the participants and wished them efficient work and a good time at the Ivushka health complex. Participation certificates were awarded to all 75 participants of the conference.

The conference was attended by the executive director of the Association of Elevators of Ukraine and a representative of the main department of the State Labor Service of Ukraine in the Poltava region. The conference was also supported by ELEVATOR WORLD Europe magazine. Foreign companies attending to share their products were Mogilevliftmash, from the Republic of Belarus, and AH&MET Asansör from Turkey. The event gave participants good opportunities to get acquainted with the products of the following companies, which were set up at presentation tables: ARM-ECO, Tech parts, PPF (Rivne), Dinistor (Kherson), Magnus (Kremenchuk), Metiz, Ray, VKF (Kyiv), B.Smart (Kharkiv), Mogilevliftmash, ELEVATOR WORLD (Turkey)and AH&MET Asansör.

Before the start of the conference, the protocol of participants was signed, and the members of the Presidium of the Conference were elected: Chairman, O. Skrypets; Deputy Chairmen, A Trymbach and O. Solovyov; and Secretary, M. Pylypiv.

Pylypiv stated:

“We emphasize that the solution of the most important and complex issues is possible only through joint efforts and at the state level. To do this, we have the Association of Elevator Workers of Ukraine, our conferences, our magazine, Lift Panorama, and a common desire to make the elevator industry important for the country as a whole. Today, there is an Association of Elevator workers of Ukraine and is a representative of the State Labor Service of Ukraine in the Poltava region. I hope that today we will solve important issues to improve the work of elevator organizations.”

Program Agenda

• Welcome speech from Lyubchenko Andriy, head of Health Complex Naftokhimik Ivushka
• Presentation by Sergey Zyrayevden, director of Dinistor PE (Kherson), on products manufactured by PE Dinistor
• Solodovnikov Denys, director, B. Smart (Kharkiv), on saving costs when obtaining a dispatch team
• Ropes presentation by Maslyuk Ihor, commercial director, Pe Metiz (Kyiv)
• Presentation of Mogilevliftmash Holdings’ products, given by Anton Belsky, deputy general director for commercial affairs, OJSC Mogilevliftmash (Mogilev, Republic of Belarus)
• Presentation of products of Magnus LTD (Kremenchuk), given by Mendeleev Olexiy, company director
• Speech to elevator colleagues from Kalush Ivan of KP Vertical (Sumy)
• Presentation of Turkish products of elevator factory AH&MET Asansör(Konya, Turkey), given by Sales Manager Kemal Uyumaz
• Presentation and invitation to the International Elevator & Escalator Symposium in Amsterdam, given by Bülent Yilmaz, managing director, ELEVATOR WORLD Europe
• Speech from Solovyov Olexander, PF Herkon (Khmelnitsky)
• Discussion by Andriy Zarya, director, the All-Ukrainian Public Organization Association of Elevators of Ukraine
• Technical Editor and Director Skrypets Oleg gave a well-received address on the state of the Ukraine elevator industry (see sidebar).

After addressing all the main issues, the first day of the 26th All-Ukrainian Conference of Elevator Workers of Ukraine ended with a festive banquet for all participants.

On the second day of the conference, the participants gathered to summarize the work and sign the Protocols, after which a trip to Kremenchuk was organized for a walk along the Dnieper, giving each participant an opportunity to see views of the city of Kremenchuk and the picturesque banks of the mighty Dnieper, as well as to communicate with each other.

All events that were planned were deemed successful and, according to the generalized opinion of the participants, were held at a “high and friendly level.”

The tradition of holding such events will not be violated, and next year the gathering of the 27th All-Ukrainian International Conference of Elevator Workers of Ukraine is in the works. Whether it will be held in Lviv, Uzhhorod or Sumy remains to be seen.

Ukraine Market Trends

by Oleg Skrypets

Today, Ukraine’s elevator industry is in deep crisis. Almost 70%-75% of elevators have exhausted their technical resources of safe operation, there is an imperfection of the legislative and regulatory framework, and there is a shortage of qualified personnel, and every year, the level of dispatching of elevators decreases by 50%.

The elevator industry is getting old every year. The number of elevators that have worked out the normative period of their safe operation (25 years) is increasing faster than the emergence of new, modern elevators. The main reasons for the unsatisfactory condition of the elevator industry in Ukraine are:

• Imperfection of the legislative and regulatory framework and, in most cases, the inconsistency of normative legal acts with the current legislation of Ukraine, and the systematic failure to review the outdated regulatory framework by ministries and agencies.
• Absence of a single centralized, targeted management and development of the entire elevator industry.
• Destruction of large, specialized organizations.
• Vandalism and looting of elevator equipment by the population.
• Shortage of personnel for maintenance and repair of elevators.
• Low level of dispatching of the existing elevator stock.
• Lack of a unified approach to the formulation of the price of maintenance of elevators.
• Lack of state, regional and local programs for replacement, overhaul or modernization of the outdated elevator park; or the lack of funds for these programs in budgets of different levels and co-owners of apartment buildings.

To improve the organizational and economic mechanism of restoring the elevator economy, the following tasks must be solved:

• Establish the reasons for non-performance of repairs, modernization, replacement of elevators by owners and stewards; and the proposal of measures to improve and restore these processes.
• Analyze the main possible sources of financing for the process of restoration of the elevator stock.
• Offer an organizational and economic mechanism for the restoration of the elevator economy, which provides for a comprehensive, step-by-step solution to this problem.

Completely destroyed in the early 2000s, the system that kept the elevator industry in good condition, and without creating any other system or body that would carry out state coordination in this area, and, most importantly, its development, the elevator park was in a state of elevator collapse. Problems began back in 2004, with the liquidation of the Republican Production Association Ukrlift. The Ukrlift association solved many issues in the elevator industry, both methodical and industrial in nature, and conducted training and professional development of elevator workers. In fact, Ukrlift association solved all issues in the elevator industry — most importantly, all the higher bodies, both party and trade union bodies, and ministries and committees were considered with it. Today, there is no such organization in Ukraine. Therefore, in the elevator industry there is neither a single tariff policy nor the high-quality maintenance of elevators. It is difficult to know how many elevators work or don’t work in residential buildings and how long they work.

Taking into account all aspects of this problem, in my opinion the most effective step in regulating relations in the elevator economy should be the creation of a separate unit in the structure of the Ministry for Communities and Territories Development of Ukraine, or the Association of Elevators of Ukraine, the composition of which should include separate departments to provide regulatory and methodological support, pricing, promising development of the elevator industry and others. In addition, the unit should include the so-called Conciliation Council, whose members are the heads and leading specialists of elevator enterprises in different cities of Ukraine. Such an important industry, on which the safety of residents of houses depends first of all, cannot be supervised only by new owners of residential buildings (condominiums, stewards); self-regulatory organizations should be the coordinator of the development of the elevator industry and its controller. Since the beginning of the new millennium in Ukraine, the following situation can be observed: the elevator industry has become unregulated; the market is overcrowded with small, unprofessional elevator service enterprises; there are no uniform technical approaches to maintenance or formulation for scientifically justified pricing policy for elevator maintenance services; the training system for the elevator industry has been destroyed; and there are violations during the expert examination of elevators. All of these aspects have led to a decrease in the quality and safety of services provided to residents of residential buildings.

Most of these organizations lack a sufficient material base and professional workers. In 2009, the Cabinet of Ministers of Ukraine adopted Resolution No. 465 of 22.04, which determined that Ukraine should have its own elevator manufacturer that would be responsible for the design, manufacture and delivery to the elevator market. Today, there are elevator manufacturers in Ukraine, including Karat-Liftkomplekt (Vyshgorod, Kyiv region), Euroformat, Ukrliftservice and several platform enterprises that carry out the complete set of nodes, parts and assembly of elevators purchased in other organizations.

In 2006, the Ministry of Construction, Architecture and Housing and Communal Services issued order No. 369 of 09.11.2006, “On approval of the Procedure for establishing the cost of maintenance of elevators and dispatching systems.” It also approved the monthly base maintenance price of the base elevator. This order allowed for the optimization of the process of setting the cost of monthly and quarterly maintenance of elevators, based on the specific features of the functioning of each of them. This order was mandatory for all enterprises of the elevator industry, regardless of ownership. Then, in 2014, the basic scheme was approved as mandatory for all elevators in Ukraine, and many organizations began to be ignored. If we take into account the cities as Chernihiv, Zaporizhya, Kirovohrad, Poltava, Ternopil, Mukachevo, Kozyatyn, Uzhgorod and Kherson, we see a big difference in the cost of maintenance. Such fluctuations indicate that the increase in tariffs for maintenance of elevators is not an investigation of regulatory documents, but the result of contracts at the local level (local councils, condominiums, stewards), and of service organizations that managed to convince the authorities of the need to recalculate tariffs. Considering the cost of spare parts for maintenance, average wages of workers, maintenance of a car park, round-the-clock emergency service, an accredited electrical laboratory, etc., the base price cannot be less than UAH3000. In most cities of Ukraine, the tariff for housing was increased, which includes a fee for elevator maintenance. But, for some reason, this increase did not affect the elevators.

Price differences require the approval of a new, single-base price for all cities of Ukraine, where elevators are very different from those of the 20th century. Therefore, it is necessary to immediately develop new “Rules for the construction and safe operation of elevators,” as well as establish the production of spare parts for new, modern elevators. Over the years of independence, the elevator industry market has changed markedly. While in the first years new buildings were equipped mainly with elevators of the enterprises Mogilevliftmash (67.8% Belarus), Shcherbinsky plant (10.1% Russia) and Karat-Liftkomplekt (5.8% Ukraine), new buildings today receive elevators from China, Germany, Turkey and other countries. In new elevators, microprocessor control stations are increasingly used, there are no mechanical devices for regulating the movement of elevators and, instead of steel traction ropes, flat polyurethane belts (reinforced with thin steel wires) and small, energy-saving gearless winches are sometimes used to allow the installation of elevators without a separate machine room at all. All of this reduces the cost of construction, ensures quiet operation and passenger comfort, as well as saving up to 50% of electricity. But all this complicates the maintenance and repair of elevators that are already installed in residential buildings, because in Ukraine there are no spare parts for them. In this regard, it is necessary to review the list of maintenance services for elevators and dispatching systems, calculate the maintenance and repair costs for each type of elevator, review the mandatory list of spare parts — the delivery and availability of which should be provided by the manufacturer and supplier of the elevators — part of the general concept of “service for the management of an apartment building.” The fee for maintenance of elevators is a part of the residential service — “services for the management of an apartment building.” Enterprises providing elevator maintenance services cannot directly provide these services to general consumers, except through an intermediary. Given the change of the owner of the housing stock (the appearance of condominiums, managers), it is time to revise the tariff for the maintenance of elevators. To do this, you need to:

• Allocate the cost of ton elevators to a separate utility service.
• Allocate to the mandatory separate service depreciation deductions for major and ongoing repairs, replacement of equipment, modernization, expert surveys and extraordinary technical inspections.

The main purpose of depreciation policy in a market economy is to create conditions for ensuring the financial needs of stewards, condominiums and owners in the restoration of fixed assets — elevators. The current legislation (Law 417) provides for the holding of meetings of co-owners of an apartment building to make decisions on all issues of management of an apartment building, including the overhaul, reconstruction, restoration, technical re-equipment of the common property of an apartment building and the determination of contractors to carry out such work. But, depreciation can be one of the main sources of funding for the restoration of elevators. A promising measure may be the use of accelerated depreciation for the elevator industry. The problems of accelerated depreciation were considered in the Order of the President of Ukraine No. 1046 of November 17, 2008: “About the pre-election mayors of the financial crisis in Ukraine,” in which changes were made to some laws of Ukraine for the introduction of accelerated depreciation as a partial measure for the period of stabilization of the financial and economic situation. This is still relevant today for the elevator industry.

The most important and complex problem of restoring the elevator industry is the financing of ensuring this process. According to the Law of Ukraine, “On peculiarities of exercising ownership in an apartment building,” the elevator is the property of the residents of a residential building, and they must, at their own expense, not only finance the maintenance of elevators, but also carry out major repairs, modernizations and even their replacement. It should be understood that the main source of funding for the process of restoring the elevator industry is the funds of residents of residential buildings. The state and local governments are not able to fully ensure the overhaul, modernization or replacement of elevators that have been operating for more than 30 years. Given the material condition of the majority of the population, it is impossible to perform this task, which can be confirmed by such indicators. In 2021 prices, the average cost of overhauling the base elevator is UAH200.000 to UAH300.000, and modernization costs UAH500.000 to UAH700.000. Elevator replacement is UAH1.000.000 to UAH1.500.000. This is not a simple sum for many residents of multi-story residential buildings. Therefore, it is necessary to develop a mechanism for attracting financial funds in this process, taking into account all subjects of the elevator services market, namely:

• Elevator organizations that conduct maintenance of elevators
• Local self-government bodies
• State bodies (banks, investment companies, etc.)
• Residents of residential buildings
• Management companies
• Factories — manufacturers of elevators, industrial platforms that make elevators, or collect them from purchased components and parts
• Private investors

All these organizations are interested in the fact that all elevators work non-stop, and residents of residential buildings are well-paid for maintenance, repair of elevators, and purchase of new Ukrainian elevators to replace old ones. It is also necessary in Ukraine to create a special coordination center for the development of the elevator industry under the Ministry of Development of Communities and Territories of Ukraine with the obligatory participation of the Association of Elevators of Ukraine. This makes it necessary to carry out planned work in stages. First of all, based on information on the condition of elevators in the regions, elevators are divided into 4 groups:

1. Elevators that no longer make sense to repair or modernize — they must be replaced with new ones.
2. Elevators that, in their technical condition and service life, require a mandatory overhaul in the first place, and after expert examination, are able to operate safely for another 10 to 15 years.
3. Elevators that, because of the technical conditions of operation, need to undergo a planned overhaul or modernization in due time so that they do not end up in the first group within a few years.
4. All other elevators must be serviced qualitatively, and all work on the replacement of individual components or parts must be carried out in due time.

Of course, it is impossible to solve this problem in one year. Therefore, in each region it is necessary to develop — taking into account the survey of elevators — a long-term plan for the restoration of the elevator for 3 or 5 years.

All regions should submit for consideration to the coordination center not only information on the distribution of elevators to established groups, but also the estimated amount of necessary financial funds. The Coordination Center, with the Cabinet of Ministers, coordinates the financial funds that can be provided for the replacement, overhaul, or modernization of elevators over a set period of years. The regions, in turn, must establish for years the financial means that they are able to provide residents of residential buildings for free or on the basis of lending in the next three years. For example: up to 40% of the funds needed for replacement or overhaul are provided to residents free of charge, and 60% of must compensated with their own funds. Associations of co-owners of apartment buildings (condominiums) and management companies should be given the right to take a loan from state-owned banks for 3-5 years at 3% to 7% per annum. To support the low-income population of residential buildings, it is imperative to use subsidies such as those they receive today for heat, gas and electricity. Today, almost all the infrastructure of life support in Ukrainian cities is in crisis. It would be expedient, after the end of the war in Donbas, 1.5% of the income of the population, which today is used for the needs of the Ukrainian army, to send for the reproduction of infrastructure not only in Donbas, but also in other cities of Ukraine.

The efficiency of efforts to restore the elevator economy can be achieved if the work is carried out systematically and in accordance with the relevant long-term plan for development. A study of the situation allows us to conclude that it is impossible to quickly restore all elevators simultaneously. In this regard, it is necessary to develop an organizational and economic mechanism for managing the process of restoring the elevator industry in Ukraine, which would allow for the restoration of the elevator economy in stages (within 3-5-10 years). Such a mechanism should include the following components:

• Institutional
• Organizational
• Economic
• Normative-Methodical
• Informational

The institutional component should ensure the emergence of new rules with appropriate mechanisms to ensure their compliance, and the elimination of the old, existing rules. The organizational component determines the roles and relationships of each service market entity involved in the process of restoring the industry. The regulatory and informational component ensures the development of the necessary rules, recommendations for operation, modernization, pricing policy, financing and monitoring of the technical condition of elevators in each city of Ukraine, with the development of local self-government, and the emergence of new forms of housing management. Now, the residents themselves decide with whom to enter a contract for maintenance or replacement of elevators. Therefore, it is necessary to formulate the functions of each market entity of elevator enterprises and elevator owners to finance the restoration of the elevator economy.

Summing up all the facts, to remove the elevator economy from a crisis state, it is necessary to use a whole range of measures, namely:

1. Most important is that the restoration of elevators should be carried out systematically, comprehensively and on the basis of the developed organizational and economic mechanism.
2. Restoration of the elevator economy must be carried out in stages: First, replace the elevators that have been in operation for 35-45 years; next, those for 25-35 years, and so on.
3. In the process of restoration, it is necessary to use not only state and local budget funds, but also funds of homeowners, elevator manufacturers, subsidies, private investments and leasing.
4. A very important issue in the restoration of the elevator industry is the abolition and revision of an outdated legislative framework and regulations with the mandatory participation of elevator workers.

It should be noted that, during Oleg’s speech, there were active discussions on all issues raised. All the participants expressed their opinion and positions, and made joint decisions. The executive director of the Association of Elevator Workers of Ukraine and a representative of the State Labor Service of Ukraine in Poltava region took an active part in the discussion.