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The Cabinet of Ministers gave ‘green light’ to concession of Olvia and KSTP

14 August 2019, 15:10

The Cabinet of Ministers gave ‘green light’ to concession of Olvia and KSTP

More than 25 Ukrainian and foreign companies are interested in concession of the state stevedores. Photo: seaport.kherson.ua

At the meeting on Wednesday, the Cabinet of Ministers took a decision to announce tender for concession of the property of SE ‘Stevedoring Company (SC) Olvia’ and SE ‘Kherson Sea Trade Port (KSTP)’. This was informed by the Minister of Infrastructure, Volodymyr Omelian.

‘The government has just decided to approve conditions and commence concession of the seaports ‘Olvia’ and ‘Kherson’! We have previously received more than twenty applications from powerful foreign and Ukrainian companies’, stated Omelian on Facebook.

According to the Minister, the process on transferring infrastructure facilities into concession has been ongoing since 2015. ‘Within these years we have elaborated a new law on concessions which was identified  by the new President of Ukraine among the high-priority ones for voting in the new parliament this fall, established Office of the Public-Private Partnership ‘Spilno’ which prepared a feasibility study on a number of infrastructure facilities under the best Western standards, passed all the bureaucratic approvals of the conditions, procedures and requirements. We have done it for the first time and are the first to do it. Moreover, we have done it right together with the best governmental, public, foreign and Ukrainian experts, business representatives’, he emphasized.

The next step will be to approve tender documentation by the Tender Committees. Thereafter, the Ministry of Infrastructure will issue orders to approve tender documentation and announce tender for concession.

Previously it was reported that tender for concession of the property of SE ‘Stevedoring Company (SC) Olvia’ and SE ‘Kherson Sea Trade Port (KSTP) would be announced in July 2019.

SE ‘Stevedoring Company (SC) Olvia’, SE ‘Kherson Sea Trade Port (KSTP)’ and  Ferry Complex of the SE ‘Sea Trade Port ‘Chernomorsk’’ are the sites for implementation of the pilot concession projects in the port industry. As of September 2018, more than 25 Ukrainian and foreign companies including Dnipro Cargo Limited, Metinvest, Portinvest, Ukrrichflot, Bunge (USA), COFCO (China), Mitsubishi Corporation (Japan), POSCO Daewoo (Korea) and some others have shown interest in concession of the property of SE ‘SC Olvia’ and SE ‘KSTP’.

Concession projects of state stevedores in ports of Olvia and Kherson stipulate attracting investments to develop port infrastructure in the amount of over UAH 18 billion. The volume of cargo transhipment within the first five years of project implementation (from 2020 to 2025) may increase nearly twice (for SC Olvia — from 2.55 million tons in 2018 to 4.59 million tons in 2025, for Kherson — from 1.1 million tons to 2.01 million tons). Revenues to the local budget of Mykolaiv during this period according to the optimistic scenario may increase twice as well — by UAH 241 million, of Kherson — by UAH 55 million.

The pilot concession projects were approved by the Ministry of Infrastructure on June 23, 2016. Feasibility studies for pilot projects were developed by a consortium of international consultants formed by the EBRD and the IFC. While elaborating feasibility study a system-oriented analysis of the market was carried out, as well as financial, technical, environmental and legal due diligences were performed. In addition, meetings with potential domestic and foreign private partners were held in order to take into consideration their proposals for implementation of the projects.

Feasibility studies were discussed engaging representatives of the labour collectives of state stevedores, local authorities, and were approved by the Ministry of Infrastructure and the Ministry of Economic Development and Trade taking into account guarantees of further employment of the employees of state enterprises.

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