Port Development Reform in Ukraine

1 Сен

Статья авторов Interlegal посвящена вопросам, связанным с портовой реформой в Украине, а также другим вопросам, которые характеризуют состояние транспортной инфраструктуры Украины. Среди них – положение на внутренних водных путях и в сфере интермодальных перевозок.

Ukraine has a unique geographical location. It is at the heart of Europe; on the one hand, having land borders with EU member countries (Poland, Hungary, Slovakia and Romania) and, on the other, with developing Eastern European economies (Russia, Belarus and Moldova).
Port Reform – Investors into port activities tend to be found among professional operators, cargo owners or shipping lines. At the moment, in the 18 Ukrainian sea
ports, it is hardly possible to find a world known port operator. Only container operators may be treated as such, i.e. CTI in Ilyichevsk, HPC Ukraine in Odessa and TIS in Yuzhny. For cargo owners, however, the picture is better. Ukraine is a leading exporter of commodities, so international traders and local financial-industrial groups have already constructed a number of dedicated terminals in Ukrainian ports. Among the shipping lines, only CMA CGM invested in a container terminal.
Why no or little investment? The answer is simple; Ukraine is in a post-socialist regime era and attracting investors has not been easy – too many public authorities are involved in the transaction and the bidder requirements are unclear. Authorities continuously demand additional documentation, causing significant delays and transaction costs. Even after final negotiations, authorities can still alter the contents of the agreements, causing uncertainty and delays and changing contractual arrangements. Such unworkable transaction processes make the institutional framework challenging; the main contracts not recognised abroad and not up to International Standards. However, this should improve because this month, June 2013, the long-awaited Law on Sea Ports comes into force and the milestones of
this law are: split administrative and commercial functions in sea ports; the promotion of investment into port infrastructure and the liberalisation of rates on port
services. From now on, Port Administrations will only be able to perform administrative functions, while commercial services will be delegated to private companies. Cargo terminals will thus become more independent and more competition is expected. The main reform tools are privatisation and concession. Land in ports may be held in any form of ownership permitted by the laws of Ukraine. So, land may be state owned or privately owned which can be treated as a revolutionary move. This creates opportunities for the financing of construction of new cargo terminals and ensuring a return on investments.
Inland Navigation – In Ukraine, the infrastructure of cargo and passenger terminals is not just limited to 18 sea ports situated in the Black Sea and Sea of Azov. There are a number of river ports operating on the inland waterways, for example in Kiev, Dnepropetrovsk and Zaporozhye. Eleven river ports, the majority of which are privately owned, suggest a sound alternative to sea ports to cargo owners and shipowners. Additionally, river ports provide an opportunity for smaller vessels to avoid transshipment in sea ports with further road/rail transportation within the country, thus saving costs to the shippers. River port facilities offer a possibility for foreign yachts and pleasure boats to explore the greatest Ukrainian river – Dnieper. Ukraine is quite friendly in opening its internal waters to foreign business.
Intermodal – As for hinterland, the connectivity is quite good. There are a lot of reliable long distance rail and road connections. Ukrainian population developing economies are quite large and regional centers of industrial activities are situated quite evenly all over the country. Probably like any other railway operator in an emerging economy, the Ukraine railway is very conservative and remains owned by the Government. The recent reform, declared in 2012 and expressed in a separate law, envisages the split of administration and commercial functions. A new public railroad company is to be established and 100% of its shares is to be owned by the Government. Generally, the law stipulates that the sector should be more transparent in order to attract private investors. There are a couple of interesting projects connected with the Baltic Sea, namely, the Viking container train shuttle (Ukraine-BelarusLithuania from Ilyichevsk to Klaipeda) and Zubr (UkraineMoldova-Poland, Belarus, Latvia and Estonia). The numbers of containers are still not significant but time will bring change. The Moldovian port of Giurgiulesti says that these projects will help them win a part of the business transit from Turkey. The figures are looking more optimistic and European and other financial institutions have expressed their willingness to invest big amounts into developing this sector.
So, what issues need to be solved for this sector to flourish? First of all, political questions. Second, lack of infrastructure investment. The Government says that it is
going to rely mainly on private money and, thus, much will depend on how the law is implemented, although the overall outlook is quite positive. Sometimes, there is the classic “co-operation versus competition” among market players and participants (currently with more competition), but this looks like a real reform supported and challenged by cargo owners. Ukraine is waiting for the attraction of money, technologies and then cargoes. Only time will tell.
The current main players in the veg oil and grain handling market in the Ukrainian ports are: Odessa: Odessa Port Transshipment Terminal (OPTT) (storage capacity
60,000.00 tons). Ilyichevsk: Risoil AS (storage capacity 110,000.00 tons); Ilyichevsk Grain Terminal (storage capacity 30,000.00 tons – under development, opening soon). Yuzhny: Delta Wilmar (storage capacity 100,000.00 tons); Risoil AS (storage capacity 60,000.00 tons – under development, opening soon); Oilseeds (storage capacity 60,000.00 tons – under development, opening soon). Nikolaev: Ukrpischesbytsyrye (storage capacity 120,000.00 tons); Everi (storage capacity 70,000.00 tons). Kherson: Khersones (located at the territory of Kherson Bakery – storage capacity 20,000.00 tons).
Авторы: Arthur Nitsevych, Artem Skorobogatov – InterLegal (www.interlegal.com.ua)