Business, IFIs and USPA Discussing Draft Concession Law before Its Consideration in Parliament’s Core Committee

2 Окт

On Monday 01 October at American Chamber of Commerce in Kiev Bill No. 8125 ‘On Concession’ was discussed being prepared for its second reading. Its adoption would essentially expand opportunities for attraction of private investments to realise large investment projects, including the sea ports which are leaders now in respect of the quantity and quality of the projects offered.
The meeting parties which embraced representatives of business, international financial institutions (IFI), Verkhovna Rada (Parliament) of Ukraine, other state bodies and Ukrainian Sea Ports Authority, pointed out a number of important clauses which to their opinion should be included in the new law. They concern the possibility of state enterprises’ acting as a concessor on a par with state powers and earn some part of concession payment.
Head of Strategic Planning Division of USPA Volodymyr Shemayev mentioned that in accordance with the decisions taken at the government and ministry level, it is the port sector that should go pioneering as regards the implementation of infrastructure concession projects. It derives from the fact that the competition of private stevedores gradually abates the share of public companies. As of today the public stevedores handle as little as some quarter of the ports throughput. Lacking investments the state cannot provide the process will go on. Hence the top state level decision was taken to transform and develop public port operators via the public-private partnership (PPP) namely concession. A major advantage of this PPP tool is a possibility of approving and monitoring investment obligations undertaken by a concessionaire. And retention of the concessioned assets as state property after the concession period termination as well, including those modernised and newly built by the investor.
“Feasibility study (FS) of public stevedores concession pilot projects for the ports Olvia and Kherson has been developed by world leading companies and finance consultants – IFC, EBRD, Castalia – and presented to investors. Tenders on these projects may be conducted within the law in force as well, however a new Law on Concession passed would substantially enhance USPA’s capabilities as those of a concessor. The authority would be able to directly participate in development of concession FSs and agreements, control performance of a concessionaire’s investment, social, environmental commitments and receive some part of the concession payment for provision of these functions”, added Mr Shemayev.
Commenting on the Law on Concession adoption prospects, Chairman of parliamental Economical Policy Committee Andrii Ivanchuk noted that for the moment there were a lot of blocks of issues the committee hadn’t yet come into a unanimous position. So those issues have to be approved by voting. As per his forecast, Bill No. 8125 may be considered at the parliamental committee session in mid October and submitted for the VR approval in early December.