There are two first itineraries already identified where the public-private partnership (PPP) projects will be realised.
State Road Agency of Ukraine (Ukravtodor), International Financial Corporation (IFC), and European Bank for Reconstruction and Development (EBRD) have signed on 21 December the Agreement on Rendering Consultancy Services for PPP Projects Development in Road Industry.
As per MIU, the first projects shall be realised on the two ranges: Kharkiv – Dnipro –Zaporizhia (М-29, M-04, M-18), and Iahodyn – Kovel – Lutsk (М-07, М-19).
“PPP on these itineraries envisages reconstruction, maintenance and capital repairs of the roads. The long-term collaboration is built on principles of the so-called OPRC, i.e. Output and Performance Based Road Contract, that evaluate a contractor’s work by particular indices of the traffic safety and comfort”, as advised by Minister of Infrastructure of Ukraine Oleksandr Kubrakov.
PPP on the Kharkiv – Dnipro –Zaporizhia range envisages repairs on 276 km of road sections. The initial Capex is assessed roughly at US$370M. PPP on the Iahodyn – Kovel – Lutsk range envisages repairs on 146 km of road sections. The initial Capex is assessed roughly at US$240M.
The partnership pattern implies that the state should entice private investments while the investor should implement a project on his own. Upon the road delivery for operation the investor shall receive payments from the state, so-called availability payment.
Let’s remind you that it is planned to further on realise such a pattern on some other ranges, namely:
– Boryspil – Poltava road maintenance;
– Kherson – Mykolaiv road reconstruction, capital repair and maintenance, and construction of a new diversion road around a settlement;
– Kyiv – Zhytomyr – Rivne road capital repair and maintenance;
– Dnipro – Kryvyi Rih – Mykolaiv road reconstruction, capital repair, and construction of a new diversion road around a settlement.